The Scope of Financial planner or Personal Financial Planner

Fixed Deposits and Safe Investment Plan Option

Flexible and Safe Investment Plan

Mutual funds are highly specialized investment schemes, that is, each of them invests in a certain type of market cap or sector. For instance, equity mutual funds invest in stocks or shares or equity and equity-related instruments. In the event that a stock does not fetch the desired results, it will affect the mutual fund and investor directly. However, the same cannot be said for ULIPs because the investment funds are made with a combination of both equity and debt in varying proportions and a certain objective in mind. Being a flexible investment, fund managers of insurance companies can choose to invest in an extensive variety of funds that show the scope of generating maximum returns. This feature also makes ULIPs a safer investment option.

Fixed deposits

Fixed deposits (FDs) are a low risk investment that can help grow money over time. Investors can choose from bank FDs or company FDs. Certain FDs also offer  income tax  benefits.

While investing in FDs may seem simple, investors must consider a few points while selecting the FD most suited to their needs:

  1. Credit profile – this helps determine whether the company will honour all capital and interest payments – higher rated FDs  should be preferred
  2. Interest rate – this is the rate of return on the FD, so a higher rate is obviously preferable. However, make sure you do not compromise on the credit rating for a higher return.
  3. Interest payout frequency – FDs are known to offer interest payouts at varying frequencies – monthly, quarterly, annually or a one-time payment on maturity. You must opt for the one that meets your needs. The one-time payment or ‘on maturity’ option generates the highest return, thanks to the effect of compounding.

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