The investment landscape is evolving, but classics like mutual funds, FDs, and RDs remain cornerstones for Indians building wealth. This guide unpacks what they are, how they work, and when to choose each for optimal results.
Mutual funds aggregate investor capital for professionally managed portfolios. From large-cap stability to small-cap growth, options abound. NAV (Net Asset Value) fluctuates daily, reflecting market performance. Benefits include liquidity (redeem anytime) and tax perks like ELSS for 3-year lock-ins with 80C benefits.
Fixed Deposits lock your principal for a term, paying fixed interest. Flexible tenures, auto-renewals, and ladder strategies (staggered FDs) enhance usability. Corporate FDs tempt with higher rates (8-9%) but carry credit risk – stick to AAA-rated.
Recurring Deposits promote habit formation with small, regular contributions. Interest compounds quarterly, and many apps now facilitate seamless setups.
Interplay matters: Use RDs to accumulate for FD lumpsums or mutual fund SIPs. Inflation at 5-6% demands beating it via equities. Track via apps like Groww or Zerodha Coin. Ultimately, align with life stage – aggressive in 20s, balanced later.