This is for only for those who just want to invest. In short, here the funds of different policy owners are directly invested in stocks of various industries and thus, the policy owner receive the return on investment as per the performance of the stock and the number of the units he/she purchased. It keeps on fluctuating, thus, the risk involved is high. Moreover, there is no tax benefit for the investor as such.
Mutual funds haven’t been able to garner the same kind of trust because many fund companies are not known to the lay investor. Mutual funds have also suffered because of quick-money schemes and chit funds, which have promised high returns but looted investors of their money. It is because of these reasons that mutual funds are not considered to be “safe” investments. However, that is not true.
Now, you may think, why invest in mutual funds, if it is volatile, risky as well as offers no tax benefits? The point to keep in mind is that it is not that costly and can offers tax benefits as per section 80 C if one invests in Equity Linked Savings Scheme. So, the dividend you receive after investing is completely tax free. Moreover, one really does not need to be an expert to invest on this plan. Still if required, you can hire an expert.
Beside these, there are few other options available where one can invest-
- Fixed Deposit- It is apt for those who need to save money without taking any risk at all. Here, the person with a bank account can easily open the fixed deposit account and deposit the money for a desired period of time. Hence, it is also called as term deposit. The deposited money keeps on multiplying as the customer receives rate of interest as per decided by the bank (Rate of interest is high for fixed deposit account than other accounts and may varies from bank to bank).
- Gold and Silver- Investment in metal especially gold is considered very beneficial. Gold is something that will always remain precious no matter which time period we are. Thus, investment on gold is bound to give good returns on your investment
- Real estate- Investing in properties is not a bad idea. Population is ever increasing, so the demand for land will also increase in the long term for setting up of industries, hospitals, schools and residential projects. The price of land always increases after few years. In fact, people who bought land in the outskirt of cities 5-10 years back have experienced dramatic price rise in the recent years.