New Delhi: Investing in stocks always carries risks. Financial analysts advise investors to weigh their risk appetite before putting money into the market. However, it’s not like all investments are destined to be doomed, some investments yield disproportionate returns. And it is this promise that drives most investors to the stock market. Though the market is an unpredictable place, a person who has spent years trading gains enough experience to understand that it is best to stay away from a volatile market and channel the money to some place that is more predictable and less riskier.
There are several options available for investors when the market gets volatile.
1) Public Provident Fund
The central government offers the PPF facility and the interest on the investment is revised quarterly. Backed by sovereign guarantees, it is considered a safe investment option. A person investing in PPF is entitled to claim tax deductions of up to ₹ 1.5 lakh a year under the Section 80C provisions. A PPF account can be opened with a minimum contribution of ₹ 500. The investment can be withdrawn after the fifth year.
2) National Savings Certificate
It is a safe investment scheme backed by sovereign guarantees and offers assured returns. A person can start investing in it by opening an NSC account at any post office in the country. It also allows a tax deduction claim of up to ₹ 1.5 lakh a year but has a lock-in period of five years. A maximum of ₹ 1.5 lakh can be invested in this scheme in a year.
One of the most preferred options when the market appears volatile. Investors park a part of their money in gold because of the security this precious metal provides. Other than investing in physical gold (coin, bullion or jewellery), you can also opt for digital gold via ETF. It is like buying gold without the need to carry it, thus reducing the risk of theft and burglary.
4) Fixed Deposit
It allows you to invest a lump sum for a fixed tenure and earn predetermined returns. Most banks offer this facility. You can find a reliable bank to invest money in by looking up its CRISIL ratings. Fixed deposit rates are revised on the basis of RBI’s bi-monthly monetary policy rate review.
5) Recurring Deposit
This option is for those who do not have a large amount to invest as fixed deposits. Under this scheme, a person can put a small amount every month to build a corpus. Recurring deposits have a predefined tenure and interest rate. Often, banks provide the same rate of interest on fixed deposits and recurring deposits.