Tips to help you put your money on auto mode
February 12, 2021
Automating savings is a great way to manage money without putting in too much effort, provided you know where to invest your funds. If you are oblivious on how to save money, it will be tough for you to fund your future goals. To start with an auto mode savings, you first need to set aside a portion of the money as savings, as soon as you start earning. Putting money on an auto mode works just like the air conditioner, when you put it on auto setting, wherein the temperature changes depending on the room.
Just like electronic gadgets, it is also possible to automate investments required to fund your various goals. To help you start with it, here are some investment tips you can consider.
- Recurring Deposit: It is a type of Term Deposit with low-risk exposure. Recurring Deposit (RD) is a popular online investment option in India, as it gives conservative investors the flexibility to choose the tenure and investment amount. The maturity period of Recurring Deposits can range from 6 months to 10 years. The money is deposited on a fixed date every month. You can initiate an RD with a minimum investment amount of Rs 500. The interest rate is fixed and remains unaffected by the market sentiments.
- Fixed Deposit: Allow your money to multiply at the maximum possible interest rate by opening a Fixed Deposit/Money Multiplier Account with ICICI Bank. By creating an FD linked to your Savings Account, a fixed amount automatically gets debited from the savings in multiples of Rs 5,000, until the tenure reaches maturity. In fact, the account renewal is also automatic without any intervention.
- Systematic Investment Plans: The auto mode can also be activated for Mutual Fund SIP, one of the best investment funds for letting your money work for you. A Systematic Investment Plan or SIP is a payment method through which you can invest in any asset class – Equity, Debt or Hybrid Mutual Fund. By activating the auto-debit feature, a fixed amount gets deducted from your Savings Account at regular intervals. You can select the Mutual Fund based on your investment objectives.
- Public Provident Fund: If you are looking to save tax and accumulate a corpus for the golden years of your life, you can automate your savings into the Public Provident Fund or PPF. Just like the above-mentioned savings plan, where a stipulated amount gets debited from your existing Savings Account, similarly the PPF Account also requires a fixed amount of investment at regular intervals. PPF has a lock-in period of 15 years. You can open the account with a minimum investment of Rs 500.
These are some of the investment options you can choose to automate savings. One should select a savings option depending on one’s goals. Along with regular investments, it is also essential for you to review your portfolio once in every six months to ensure you are in line with your financial goals.
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