Where and how to invest money for higher returns in 2018

It is often said that to grow your money, you must invest it. But how do you know where to invest, and which investment would give you the best returns? There are so many investment options that could confuse you. 2018 is a great year to get higher returns on the money that you invest.

Earlier, the more you worked, the more money you would earn. However, the trend is now changing, and you can get money to do all of the work. You can do this in two ways:

Using money, to earn money: 

In this method to give your money to a bank or an investment firm for a set period. This money would be used for various reasons and will come back to you after the determined period with interest.

Procure something that increases in value: 

This is another good way to invest your money. When you have money in excess, you can buy assets like gold or a home. When you are in need of the money at a later time, you can sell the assets and use the money.

Bajaj Finserv brings you pre-approved offers for personal loans, home loan, business loans and a host of other financial products. This not just simplifies the process of availing money, but also helps you save time.

While making any investment, you need to take into consideration the risk and the rewards that are associated with it. Most people think that investing is like gambling -- you never know what will happen. However, by having all the information and deciding after measuring the risks, you can earn higher returns in a shorter amount of time.

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Here are some great investment options for you

Public provident funds: 

If you are not the kind of person who likes risk this is a great option for you. It is tax-free income that you can gain by just opening a PPF account and let the interest compound until the end of the term. However, this money is locked-in for 15 years that can be extended for five more years.

Fixed deposits: 

You can choose to have a FD either in a financial institution or a company fixed deposit. Though the interest rates offered by company FDs are usually higher, they come with risks. FDs offered by banks and non-banking financial companies are safe. Bajaj Finance, for instance, offers the most competitive interest rates on fixed deposits.

Mutual funds: 

We are currently in a very strong multi-year bull market. Investors can choose to invest in mutual funds. Your best bet would be to choose equity as well as bonds so that you minimise your risks. Mutual funds can be short-term or long-term according to your needs.

Post office saving schemes: 

This is one of the best investment options in India. There is no risk involved in this scheme and is a good option for someone who wants to have a regular income after they retire.

Systematic Investment Plans (SIPs): 

SIPs allow an investor to invest a fixed amount periodically in a mutual fund. They deter you from short-term market movements and allow you to cut the emotions out of equity investment. You can start investing in an SIP with an amount as low as Rs 500. SIPs should be treated as long-term investment options. When the market is up, you get fewer units, and when the market is down, you get more units. Staying put in an SIP for long, averages out the purchase cost. It gives you the power of compounding by letting you earn returns on your returns.

ULIPs: 

Unit-linked insurance plans (ULIPs) have traditionally allowed you to have the best of the both -- an insurance cover as well as market-linked gains. ULIPs also offer tax benefits u/s 80C of the Income Tax Act on the premium paid. Payouts too, at the time of maturity, are exempt from being taxed under u/s 10(10D).

The government has reintroduced the long-term capital gains (LTCG) tax for FY 2018-19, on profits over Rs 1 lakh from the sale of equity mutual funds or shares held for over one year. However, ULIPs are exempt from the LTCG tax and can be a good investment option for someone who is looking for market-linked gains.

Choosing to invest in any one of these options can help you make you a lot of money this year.