February 13, 2012

An insight into Share market - part4

Whoa !! My 100th  post. Thanks to all my readers for your continuous support.
I promise to keep you posted.

I have been researching more time on fixed outcomes on investments lately and I thought I should pen it down here. We can risk half our money provided the other half is safe. Thus the fixed income come into picture.
Unlike investing in equities and mutual funds which yield returns that is fully dependent on the market value there are a few ways where you can ensure that you get fixed outcome of returns before you start investing.
Say there is a policy which says "You invest Rs.15000 p.a for 7 years and after 15 years we return you get around 4 lakhs though your accumulated amount is around 1 lakh". Hmm, quite a good deal right?
Thats what you call it as fixed outcome of returns on your investment.

Like I said there are several ways of fixed outcome of returns:

1.Public Provident Fund (PPF):
                          Government aided. Can be categorized under Small Savings Scheme.
Below is the screenshot of PPF sheet. Interest rate used to 8% earlier. Now I found that it has increased to 8.6% as on Dec 2011. Minimum investment is Rs.500 p.a and maximum is Rs.1,00,000 p.a Lock in period is 5 years. The policy matures after 15 years.  Very flexible and a rewarding one if you are looking for a long term investment

2. Fixed Deposits:
                Not that this is very unknown to anyone. I have been searching for banks which offer higher interest rates for shorter period of time. Many private banks give interest rates upto 9%. But is there any bank which gives interest above 10%? Yeah I stumbled upon a few.

Tamilnad Mercantile Bank and Bharat Cooperative offers 10.25% of interest rate p.a. for less than 15 lakhs.
Check it out.

3. Company Deposits:
                   Like the way you deposit in banks you could also deposit in companies which gives you higher interest rates. Below screenshot might be useful to you.

4. Bonds:
                 This term is often heard in the investment world. Well, for newbies here goes the definition. The company that issues the bond holds a debt and promises to repay the lender with interest and  principal at maturity. In simpler terms, you lend a company some amount and the company pays you the interest every now and then as specified in the bond. After a period of say 5 years or so, the company has to repay the principal to the lender.
For now I have only started with Bonds. So im leaving this with here.

I have written here what I browsed through. Hope it helps you harvest your money better in future.

Awaiting your comments :)
Happy investing!

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