- Make a Shopping List
- Reduce Your Lifestyle Expenses
- Shop Online
- Income Tax Deductions
- Avoid Incurring Debt
- Decide your Financial Goals
- Multiple Sources of Income
Earning money is difficult these days, but saving money has become even more difficult in today's world. Youngsters in India often crib about not being able to save money in a fixed deposit scheme since their expenses are too much. As Ric Edelman, author of The Truth About Money, said, "Don't blame your income for the fact that you are not saving money." You can save money even with a meagre salary and invest it in any asset class, and this is how investment for future saving starts.
This first part of this blog covers some of the unique ways of saving money. And the second part will explain low-risk financial products like fixed deposits, recurring deposits etc., to invest the money that you have saved. As the first rule of investment for beginners, to invest money in any asset class, you need to first have some money, thus start saving. One caveat upfront before we start is that financial success is a time-consuming process, even if you invest in the best saving schemes. Thus, you need to have the patience to see your savings multiply. Now, let's get started to answer the question of How do I start saving? Here it goes:
There are multiple asset classes or financial products to invest your savings in India, from gold to real estate and fixed deposits to equity shares. However, for someone from a small town with limited access to the internet, there are many low-risk decent returns financial products like fixed deposit schemes. Additionally, little understanding of complex financial products like equity, mutual funds, and ETFs makes them unfavourable and risky for investment for beginners.
Thus, such investors should go for financial products that carry low-risk and offer assured returns. Some of these products are fixed deposits, Government bonds (G-Sec), recurring deposits, high-interest savings bank account etc. Out of these less risky asset classes, a high-interest rate fixed deposit is ideal for an investor with a long-term horizon and thus the best investment for beginners.
The compounding effect (compound interest or, as Albert Einstein termed it as The Eighth Wonder of the World) also works best in the long term only. Thus, to taste financial success, it is advisable to start early and stay invested to witness your savings multiply. The compounding effect is one process that every investor should be well-versed with before making an investment for future saving.
There are multiple fixed deposit plans that are offered by both traditional banks and NBFCs. However, one should compare these plans across different institutions offering them to get the best deal. There are certain parameters on which you can compare different types of fixed deposit schemes, likes higher interest rate, lesser documentation, flexible tenor options, multiple interest payout options, premature withdrawal and nomination facility etc. The best saving scheme is one that has the most favourable terms and conditions based on your needs.
Fixed deposit schemes offered by NBFCs are slightly better than the ones offered by traditional banks. This is because these NBFCs tailor the fixed deposit to your requirements and offer superior rates of interest. At Shriram City Union Finance Limited, we offer the best scheme with a minimum fixed deposit amount ₹5000. This coupled with high interest rates of up to 7.75%, minimal paperwork, and flexible tenor options, differentiate us in small investment schemes. To read more about our fixed deposits, click here. We also have a fixed deposit calculator on our website that you can use for free to compute the returns on your investment. Allow us to serve you!!