8 Interesting Ways To Make Your Savings Grow

A rupee saved is a rupee earned, goes the saying. But saving is not enough; your money should grow according to your needs. And how do you achieve that? The answer is simple – through investments. By investing your savings, you can multiply the amount, all while you are busy saving some more.

There are many short- and long-term options available, so it’s up to you to choose one that considers your future needs and the amount of money at your disposal. Even if you exclude the options most people are familiar with – Savings Account, Fixed Deposits, Insurance, Gold, Real Estate, and Public Provident Fund – many other instruments are available to help you grow your money and secure your future. 

1. Recurring and Fixed Deposits

Recurring Deposits (RD) and Fixed Deposits (FD) are savings instruments banks and financial institutions offer. RD involve regular monthly contributions over a fixed period, earning interest at a predetermined rate. FD require a lump sum amount to be deposited for a specified tenure, with interest compounded periodically. Both offer guaranteed returns and are considered low-risk investments.

 HDFC Bank offers a Regular Fixed Deposit, which offers:

• Easy investment with high returns

• Great rates, flexibility, and security – all in one offering

• Higher rates of interest for senior citizens

• Convenience of making deposits through NetBanking
   

The 5-Year Tax Saving Fixed Deposit scheme too comes with certain benefits:

• The minimum investible amount is ₹100, and thereafter, in multiples of ₹100

• You can invest a maximum of ₹1.5 lakh in a given financial year

• You can choose between a monthly and a quarterly payout

• You are eligible for deductions under Section 80C of the Income Tax Act (IT Act)
   

On the other hand, if you don’t want to invest a lump sum, the HDFC Bank Recurring Deposit scheme allows you to invest small amounts every month while enjoying the following benefits:

• Same rate of interest as an FD account

• Start with an investment as small as ₹ 1000 (multiples of ₹100 thereafter), up to a maximum of ₹15 lakh per month.
   

2. Company Fixed Deposits

Company FDs, also called Corporate FDs, offer higher interest rates than bank FDs and are a popular option among risk-averse investors. If you’re willing to bear a small degree of risk and, more importantly, willing to invest for the long term, this can be a good option. Remember, you can’t withdraw the invested money before maturity. However, you can evaluate your investment using an FD interest calculator to help you make an informed decision.

3. Mutual Funds

Mutual Funds as an asset are the wealth creators for any portfolio over the long term. Mutual Funds are a relatively safe way to invest in the stock market without leaving yourself open to the same level of risk as trading in equities. Investing in Mutual Funds has its own benefits, such as - 

• Low investment cost

• Managed by professional managers

• Offers flexibility in terms of mode of investments and liquidity

• Offers a variety of products suitable as per risk profiles & investment objectives

• Performance is tracked & recorded.
   

You can invest in mutual funds via lumpsum or SIP. The former involves making a one-shot payment into the scheme of your choice. In contrast, a Systematic Investment Plan (SIP) is a tool that helps in wealth creation by investing small amounts of money at regular intervals over a period of time. This averages out the risks associated with market fluctuations and provides better long-term returns than most other saving instruments.

Since a SIP is a disciplined investment approach and offers compounding benefits, it helps achieve long-term financial goals. Simple principles in order to reap maximum benefits of SIP - Starting early, Investing regularly, Investing rightly

4. Post Office Savings Schemes

Post Office Savings Schemes are investment opportunities provided by the Indian Postal Service. They offer secure, government-backed options to address different financial objectives. Some popular schemes offered by the Indian Post Office are:

• National Savings Certificate (NSC)

• National Savings Scheme (NSS)

• Kisan Vikas Patra (KVP)

• Monthly Income Scheme

• Recurring Deposit Scheme
   

All these instruments typically yield a higher return than bank FDs, have a low risk associated with them, and are not subject to Tax Deducted at Source (TDS).

5. Money Market Funds

Money Market Funds invest in short-term, low-risk financial instruments such as Treasury bills, certificates of deposit, and commercial paper. These funds aim to provide investors with a safe, liquid place to park their money while earning a modest return. They are known for their stability and high liquidity, making them suitable for short-term investment needs and preserving capital. These instruments are recommended for people with low risk- low return appetite.

6. Equity-Linked Savings Schemes (ELSS)

As with any product linked to market performance, ELSS has an element of risk, but the rewards are potentially higher, too. These are a highly attractive savings option for two reasons:

• Designed to save tax under Section 80C

• Have a short lock-in period of only three years
   

With ELSS your money multiplies faster than most other forms of investments – a result of the effect of averaging and the power of compounding. 

7. Unit-Linked Insurance Plans (ULIP)

ULIPs are a market-linked offering that provides a combination of investment and insurance. These are flexible products where the equity-to-debt ratio reflects your risk appetite. Many insurance companies offer ULIPs, and low commissions and charges make them cheaper than mutual funds.

8. Equities or Shares

This is one of the riskiest forms of investment, so you must be well-versed with the stock market. The thumb rule must always be to invest for the long term so that the benefits of the investment can truly shine. Playing the markets for quick returns is not ideal, so be aware of the exposure you allow yourself.

However, if you are a relatively savvy investor who’s done some research, HDFC Bank has a secure, modern and hassle-free Demat solution for you. This flexible offering can be customised for purchasing and amassing investments in shares, mutual funds, Initial Public Offerings (IPOs), Exchange Traded Funds (ETFs), or Non-Convertible Debentures (NCDs).

Armed with this knowledge, you should spend time thinking, researching, understanding, and talking to your financial advisor (or a knowledgeable friend). When it comes to investments, there are many factors to consider. Only once you have evaluated these should you move to invest in a suitable instrument. Remember to diversify your savings across multiple products, not just one or two. Happy investing!

You can create your Fixed Deposit Asset today with an HDFC Bank Savings Account. New customers can book a Fixed Deposit by opening a new Savings Account, existing HDFC Bank can book their Fixed Deposit by clicking here.

* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.