Now question arises what are the long term investment options
Company Fixed Deposits - These are short-term (six months) to medium-term (three to five years) borrowings by companies at a fixed rate of interest which is payable monthly, quarterly, semi-
annually or annually. They can also be cumulative fixed deposits where the entire principal alongwith the interest is paidat the end of the loan period. The rate of interest varies between 6-9% per annum for
Bonds: It is a fixed income (debt) instrument issued for a period of more than one year with the purpose of raising capital. The central or state government, corporations and similar institutions sell bonds. A
bond is generally a promise to repay the principal along with a fixed rate of interest on a specified date, called the Maturity Date.Mutual Funds: These are funds operated by an investment company
which raises money from the public and invests in agroup of assets (shares, debentures etc.), in accordance with a stated set of objectives.It is a substitute for those who are unable to invest directly in equities or
debt because of resource, time or knowledge constraints. Benefits include professional money management, buying in small amounts and diversification. Mutual fund units are issued and redeemed by the Fund
Management Company based on the fund's net asset value (NAV), which is determined at the end of each trading session. NAV is calculated as the value of all the shares held by the fund, minus
expenses, divided by the number of units issued. Mutual Funds are usually long term investment vehicle though there some categories of mutual funds, such as money market mutual funds which are short term
instruments.
PPF - Actually its not long term . It is very long term of 15 years.with interest rate of 8%(generally decided by Govt.)A PPF account can be opened through a nationalized bank at anytime during the year and is open all through theyear for depositing money. Tax benefits can be availed for the amount invested and interest
accrued is tax-free. A withdrawal is permissible every year from the seventh financial year of the date of opening of the account and the amount of withdrawal will be limited to 50% of the balance at credit at
the end of the 4th year immediately preceding the year in which the amount is withdrawn or at the end of the preceding year whichever is lower the amount of loan if any.Currently this facility is available with ICICI bank also.The interest is tax free.
Post Office savings - Post Office Monthly Income Scheme is a low risk saving instrument, which can be availed through any post office. It provides an interest rate of 8% per annum, which is paid monthly. Rules and regulation may change as per Govt circular.
annually or annually. They can also be cumulative fixed deposits where the entire principal alongwith the interest is paidat the end of the loan period. The rate of interest varies between 6-9% per annum for
company FDs. The interest received is after deduction of taxes .
bond is generally a promise to repay the principal along with a fixed rate of interest on a specified date, called the Maturity Date.Mutual Funds: These are funds operated by an investment company
which raises money from the public and invests in agroup of assets (shares, debentures etc.), in accordance with a stated set of objectives.It is a substitute for those who are unable to invest directly in equities or
debt because of resource, time or knowledge constraints. Benefits include professional money management, buying in small amounts and diversification. Mutual fund units are issued and redeemed by the Fund
Management Company based on the fund's net asset value (NAV), which is determined at the end of each trading session. NAV is calculated as the value of all the shares held by the fund, minus
expenses, divided by the number of units issued. Mutual Funds are usually long term investment vehicle though there some categories of mutual funds, such as money market mutual funds which are short term
instruments.
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