What to do when you have Surplus Funds?
Many people opt for investing their funds as they have their own reasons to do so. Some invest for having a financial security while some invest to purchase luxurious goods in future. Investing your funds can be the best option than saving them. Investing can give you high returns, which you can either reinvest or spend as per your desire, as investments can replicate your fund.
One can go for investments if he has surplus income coming in. Now there are many ways one can have surplus income. This surplus income may come from a salary appraisal or a business profit. You may also have some cash coming in from old age pension.
Now saving a surplus amount won’t be a smart idea. Investing this surplus income can benefit you with some extra cash. It’s a common belief that you need to work a lot in order to have a huge amount of savings. But that’s not the truth. You need to think wisely and invest your money at the right time to get profitable returns.
Investment options
There are many investment options available in the market: shares, mutual funds, fixed deposits and also you can invest in gold. Investing in gold can be a onetime investment wherein you can sell gold in future when you need cash. You will certainly get the gold market value when you go to sell it which can be higher or lower than your cost price, as the market keeps on having ups and downs.
Investing in shares can give you returns according to the market situation. You can either earn a profit or gain a huge loss. While mutual funds can be great as you get higher returns on your investments. But this all investments involve higher risk in them. One can only go for these if you are ok with having huge risk involvement and wish to earn higher returns.
Fixed Deposits
Fixed deposits (FD), on the other hand, can be the best place to invest if you are looking for low-risk involvement and higher returns. FD offer higher interest rates compared to savings bank account. One can definitely go for fixed deposits if you are new to investments. Investments can be scary at times especially if you are investing for the first time. And the market ups and downs can really make a person rethink about investments.
Investments, if done correctly, can be the great way to earn higher returns. If your surplus cash is in a lump sum amount, the best way to invest in FD it can be by investing in parts. Investing your lump sum into different banks fixed deposits can surely benefit you with higher returns.
Now interest rates on FD offered by banks vary from banks to banks. FD interest rates also depend upon the amount you wish to invest plus the tenure of your fixed deposits. These interest rates help you in earning extra funds on your investments.
Not only banks but also many NBFCs provide investment options. In fact, the interest rates offered on NBFCs investments are much higher compared to the banks. Also, the risk involved with them is high as they are not as safe as banks.
Returns on your investments with NBFCs majorly depends upon the market behavior. If the market rates change this will directly affect your returns on investments. Currently, the process of investing has been made much simpler. So many people also go for reinvestments to earn more funds.
Thus, investing your surplus funds can be really profitable instead of simply going for a savings account.
