Does Saving Your Money Is Really Growing Your Money?

       Hello Friends !!! People earning money by doing jobs or businesses. Most people know how to earn money. Nowadays there are a lot of earning options available in the market  some are online and some are offline. I have shared one blog with you on online earning ideas https://priyankavanshika.blogspot.com/2020/09/great-work-from-home-ideas-2020.html. Today we are discussing the topic Save Money, Grow Money. There are different types of investment available in the market one of which I have discussed with you is the Stock Market. Today we are discussing the following other interesting topics.

 Saving Account :

 A Savings account is for any individual person. Individuals can open savings accounts. Main purpose of saving accounts is to save money gradually. You get an interest rate of 3 to 6% on this savings account by the bank. Interest given to you may be monthly, quarterly or annually.  Most banks mandatorily required the holders to keep a minimum specific amount in his account to keep it operational. Saving accounts encourage and promote saving among individuals. It is suitable for regular earners. Saving accounts are of types Salary Saving Account, Regular Saving Account, Zero Balance Account, etc. Money in a savings account can debit it anytime, anywhere so we can also call it an expense account. Now you think this account will save or grow your money or not.

 Benefits of Saving Account :

1. For most of the banks you get a discount of 15-20% on your locker fee if you are consistently maintaining minimum balance.

2. Many banks provide medical insurance or health insurance on savings accounts.

3. You can use a savings account for opening a DEMAT account.

4. Saving cards gives you the opportunity to convert a debit card into an international debit card.

5. The Savings account also used to pay bills of credit cards and other bills also.

6. Saving accounts are safe and there is no risk.

 Fixed Deposit :

Fixed Deposit  is a form of term deposit, in which a fixed amount is deposited in a bank, for a fixed period and that amount is repayable at a future date along with interest earned. Fixed Deposit  amount is deposited for a fixed term in the bank for 6 months, 1 year, 2 year, 3 year, etc. You will get a fixed rate of interest on the deposited amount which varies from bank to bank.  It is one shot deposit. You can invest a large or lump sum amount of money at one time. Fixed deposit terms may range from 7days to 10 years.There is tax deduction in Fixed Deposit, when amount is more than 10,000 Rs. It is safe to invest money in Fixed Deposit.

Recurring Deposit :

 Recurring Deposit is cumulative deposit, it is a form of term deposit in which a specific sum is required to be deposited compulsory by depositor at regular intervals for a definite term. Interest rate on RD is equal to interest rate on FD. Customer has deposited a fixed amount at a predetermined frequency for a fixed period. Total amount with fixed interest is repayable at maturity period. Premature withdrawal also allows in Recurring Deposit in case of emergency, but rate of interest will be low and penalty will be applicable in such a case. Recurring Deposit terms range from 6 months to 10 years. There is no tax detection in Recurring Deposit. Recurring Deposit has less risk. Generally people who have low income invest in RD.

Sovereign Gold Bond :

As the name specified it is a bond not physical Gold. It is a fixed return bearing instrument. Maturity period of SGB is 8 years. Sovereign Gold Bond  is issued by the Reserve Bank of India. As RBI governance by Government of India there is nothing like defaulter. “Why should one invest in SGB?” Answer is, if you see the last 5-10 years the record rate of gold increased. If the price of gold increases you will get good returns in coming years. Fixed rate of interest on gold is 2.5% per annum. You get this interest on a semi-annual basis that is for 6 months. Calculation of interest rate is simple interest. It is good to buy SGB online because you will get a discount on Gold price and it is safe.

  For example, suppose gold price is 5200 Rs per gram now or for 1 unit, if you applied for this bond digitally, you will get a discount of 50 Rs, your payment will be 5150 RS. But 2.5% interest rate  is applicable 5200 Rs not 5150 Rs. 

   Now suppose I buy 1 unit (1 gm) gold at 5150 Rs and after 8 years the price will be 6200 Rs, then my capital gain is 1050 per gram and tax deduction is zero. But if I need money urgently and I want to sell it off before 8 years. In such a case,  there is an exit option where this unit  gold will sell on the secondary market. But in this case, tax deduction is there. 

     Now you can invest the maximum amount of 4kg gold in 1 year. If you want to purchase this bond you can apply offline also but you have to hold a physical certificate carefully for the next 8 years.

  The good thing about SGB is you can invest from less money. If you want to purchase it you can purchase directly from a broker who is handling your DEMAT account or Bank account also.

  Stocks :

As many of you know, stocks have given historical returns. It is good to invest in stocks. I have shared a blog on it for more information visit  https://priyankavanshika.blogspot.com/2020/09/investment-in-stock-market-for-begginers.html

Mutual Funds :

 In Mutual Funds there is a mutual fund manager who makes decisions on your own money which is invested with that mutual fund. Mutual fund organizations collect money from people and invest those money in different different opportunities.

  Types of Mutual Funds 

1. Equity mutual fund => collect money from people and invest in the stock market.

2. Debt Fund=> collect money from people and invest in debt (risk is less because there is no stock market)

3. Hybrid Mutual Fund=> it is little bit equity and little bit debt

4. Solution Oriented mutual Fund=> it is for time period solution, after particular time period you can exit your moneyfor example Child Education Fund, Child Marriage Fund, etc.

5. Other Mutual Funds=> collect money from people and invest in index funds such as Nifty and Sensex.

                There are some risks in mutual funds. 

                 We will discuss more on mutual funds later.

 Insurance :

 Insurance is a legal agreement between two parties, first is individual and other is insurance company. Meaning of insurance means it insured people about their money and assets . A fixed amount of money (premium) taken by an individual for some fixed period of time by insurance company. If that individual suffered some loss so that insurance company will pay for this. 

    Type of insurance

1. Life Insurance=> It ensures individual life, if the head person of the family died, then this insurance worked. Insured amount given to that family to support them.

2. General Insurance=> This  insurance covers health, home, vehicle, car insurance,etc.

I hope this information helps you to save, grow money. Thank You !!!!!