Simply earning money and keeping it idle in a bank account or just saving your hard-earned money may be sufficient to meet your long-term financial goals. Investing your money can help potentially beat inflation and generate positive returns over a period of time.
When it comes to millennials, they come across as more risk-taking compared to the Gen X generation in matters relating to investing in financial products. However, a high-to-medium risk instrument may not always offer high profits and vice versa and that makes it critical for millennials to invest prudently.
Here are the top investment options for millennials to consider investing keeping a balanced financial corpus in mind.
Public Provident Fund (PPF)
It is important for millennials to understand that starting early and remaining invested for the long term can help generate wealth by reaping the benefits of the power of compounding. Millennials can generate a huge corpus over a long-term horizon if they plan and execute consistently across well–researched asset classes. The way PPF works is simple:
- Investment in PPF is considered suitable for all investors across all age groups.
- One can start as low as INR 500 in a financial year.
- PPF provides benefits of steady interest generation and tax saving investment benefits.
- The interest generated through PPF is tax free and is determined by the government and the limit of the deposit in PPF is INR 1.5 lakh per annum.
- This is one of the investment vehicles where investors can garner the benefits of the power of compounding. The interest gets compounded every year and is credited at the end of every financial year.
- It has a lock-in period of 15 years and investors can extend this investment span by five years.
- As the investment is not market-linked, it offers guaranteed returns to protect the investment needs of many people, and thus, is safe for millennials.
So it’s prudent for one to start investing some money now and be consistent for a financially secure future.
National Pension Scheme (NPS)
Regulated by the Pension Fund Regulatory and Development Authority (PFRDA), NPS is a government-operated scheme. It is a diverse investment option that ranges from corporate bonds, government bonds, equity and fixed deposits.
As a millennial, whether you are still an associate working at a mid-management level or senior position, saving and investing is quintessential.
- The sooner one starts, the better, because investing in 20s and 30s gives one ample time to build a diversified portfolio, which further means better returns.
- When it comes to retirement planning, an NPS investment appears to be more relevant for millennials …….
Source: https://www.forbes.com/advisor/in/investing/investment-options-for-millennials/
