In India, we can see a growing percentage of women taking interest in investing. Women are generally considered to be intelligent in terms of savings and tend to outperform their male counterparts. Women are seen taking decisive steps to ensure that they and their families have a secure financial future. For women who have not started their investment journey, Women’s Day is an ideal opportunity for women to achieve this goal.
Today, women in India have a wide range of options to choose from and diversify their portfolio of investments. For someone who is new to investing, they can opt for this rule.
It may be suggested that 50 per cent of the corpus may be allocated in equities which may be a mix of mutual funds and stocks, 20 per cent in fixed income such as fixed deposits and debt instruments, and the balance in gold and liquid instruments. Maybe in. As a general rule, women should invest $100 less their age taken as a percentage in the market for substantial returns.
Investing in stock market and mutual funds: While investing in the stock market, one must follow the 5 percent rule which essentially says that the investment in a particular stock should be limited to 5 percent of your total outlay in the equity markets. I am suggesting a higher outlay for the equity market as equities offer stock returns above 15 per cent CAGR over a 15 to 20 year horizon.
This year’s Union Budget has also opened up opportunities to invest in specific sectors in the stock markets. These include key government sectors such as infrastructure, electric vehicle stocks, green energy, manufacturing (thanks to the expansion of the PLI scheme) and logistics. One can also invest in thematic mutual funds built around these sectors.
Mutual funds are becoming a common investment vehicle but one should proceed with proper study and research. With so many options like liquid, debt and equity schemes, the returns also vary and one should invest based on one’s goals and risk profile. SIP is a good way to invest consistently and also helps in getting tax saving benefits.
Sleep: Gold is one of the most sought after options when it comes to women and it has stood the test of time as well. However, instead of saving in physical gold, the government has introduced a new scheme of Sovereign Gold Bonds which helps to store the gold in electronic form and also pays a small interest.
Public Provident Fund: Public Provident Fund (PPF) is a common instrument. It is a long term savings scheme with a tenure of 15 years and offers better interest rate than fixed deposits. The current rate is 7.1%. The annual investment can start between Rs 500 to Rs 1.5 lakh.
Kisan Vikas Patra: This is a popular investment scheme offered by post offices in India and can be considered for some long term goals. Systematic Investment Plan (SIP) is valid for 9 years 5 months and the current interest rate is 6.9 per cent per annum. This scheme protects manifold capital. There is no maximum contribution limit but a minimum investment of Rs 1,000 is required.
Another scheme offered by post offices is the National Savings Certificate (NSC) which pays an interest of 6.8 per cent per annum. NSC has the benefit of tax deduction which makes it a desirable option among working women. This scheme comes in two terms of five years and 10 years.
Other options in Post Office are Time Deposit Scheme and Post Office Monthly Income Schemes which offer options ranging from 1,2,3 and 5 years and tax saving benefits.
Bank fixed deposits or corporate deposits with triple A rating can also be considered for investment. The rate of return varies with banks and corporates having no maximum limit.
There are now a plethora of investment options available to women in India that can meet their short-term and long-term financial goals. Successful wealth creation can be achieved by women with a proper planning, research, careful thought, time and understanding of the means invested.
Disclaimer: Vikas Singhania is the CEO of TradeSmart. The views expressed in this article are those of the author and do not represent the stand of this publication.
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