Where to Invest-Bank Fixed Deposits, Insurance, Mutual Funds? Find out here

Hi All,

A very warm welcome to all !

As we always aim to derive maximum ROI from our investments, we often make decisions without knowing any further impact of the same.

We have seen our past generations or even us  investing in Bank Fixed Deposits to earn interest and increase our wealth. Let me tell you there is no investment which is bad. It is just like we need to find out which investment can get us good returns in the present global and economic scenario.

Let me make it very simple. We compare the returns on the investment by checking ROI which a particular investment is providing us as compared to the other options over a certain period of time.

So, now it becomes very simple to understand that any investment which has a higher return is better.

But there are two things which run in same directions- Return & Risk.

Bank Fixed Deposits have a lowest risk and lowest return. ( Considering 10 % tax deduction on the earned interest). This seems good for people who do not want to take any risk but then there is a flip side. We all know about inflation, i.e. the rate at which things become costlier each and every year.
A bottle of coke does not cost as much as it was 10 years back or 5 years back. The same goes true with any things around you. Look at anything and you would see the price is more now as compared to some 5 years ago or more years ago.

Why So ?

The reason is inflation which is not bad as this is a part of economy but here is the catch.
Suppose the inflation is 6 % and my money is also growing at 6 % ( excluding taxes) , then I have depreciated my wealth, which means, that the rate of increase in the cost  of everything which I use is same as the rate at which my money is growing. So, I have not made any gain but I have made a loss of 6%( inflation)- 6 % ( ROI on FD's etc.)=0% or even negative if I also consider 10 % tax.

So, what we can do ?. Its simple go for investments where return is more than 6 % inflation. In India, 6 % is the maximum range of inflation set by RBI , hence, go for any investment where you are getting more than 6 %.

Now, how to find such an investment ??

Its again very simple, go for investment in NIFTY ( an indicator of our economy). You all must have seen that our economy has been growing and we are growing at par to China which is a good sign for India as an economy. Also, it is not risky at all if investments is made for a longer horizon, i.e. more than 5 years at least and a minimum of 15 % CAGR ( Compounded Annual Growth Rate) can be achieved.

I will write my next  article on investments in nifty soon. Also, going for any large cap mutual fund with lowest expense ratio can also yield attractive return with lesser risks as compared to small cap and mid cap funds.


Don't panic with the ups and downs as the end result will be positive for a longer horizon of time. You may check nifty performance online and you would see the graph going upwards and will continue.

Then, we move to traditional life insurance that continues for a longer period of time. Well, there is nothing wrong in taking insurance but we should understand this by now, that any investment which gives us more than 6 % is good. So, always check with your insurance agents about the exact returns. Generally, they share some 11 % to 19 % but the same is not true.

Always ask them about IRR ( Internal rate of return ) on the policy. If they give you in writing that IRR which is the right return for insurance policies is more than 6 % after excluding commission of the agent, then you may go for the insurance policy.

But then, this is not true as per the present scenarios as the actual return ( IRR) on insurance policy is not that much which no insurance agent talks about.

So, take a piece of time and do check all these thing before making investments and make your money work for you while you are relaxing by choosing the right investments.

Comments, questions, suggestions and feedbacks are most welcomed at hina.gupta19@gmail.com

Thanks!!!