Best investment options for salaried persons during stock market crashes

When planning to invest, you may come across several investment avenues that promise high returns. Investing in the stock market can help you earn huge profits, but, volatile markets and economic uncertainties have necessitated the need for diversified investments and emergency funds.

To balance your financial portfolio during stock market crashes, you must diversify your investments and create an emergency reserve. For this purpose, you can either invest in short-term investment options or long-term investment options as per your financial needs.

Read on to know 5 best investment options to protect your hard-earned money if you are salaried and the market crashes.

Fixed deposits
The main reason behind the popularity of fixed deposits are the attractive interest rates that are completely risk-free. FDs help you grow your savings while offering you certainty and safety.

NBFCs offers you Fixed Deposit interest rates up to 8.75% when you start a cumulative FD for at least 36 months and a suite of exciting features such as flexible tenor, multiple interest payout options, and online account management to access and keep track of your earnings easily.

Payouts from FDs are not dependent on market performance, unlike when you invest in the stock market, which make it a safer investment avenure.

National Pension Scheme (NPS)
Pension plans like National Pension Scheme are backed by the government and provide financial stability and security to you after retirement when you don’t have a regular source of income. NPS earnings are safe market-based returns, where a maximum of 50% of your contributions can be invested into equity markets over the long term.

You can invest your savings to build a retirement corpus and get lump sum in the form of regular installments post-retirement or after the age of 60 to cover your expenses and also to maintain your standard of living. You can opt to start a Tier-I account, which required a minimum contribution of Rs.6000 annually or a Tier-II account, which requires an annual contribution of Rs.2000.

Mutual funds
Mutual funds are an investment option where you can invest your money to purchase securities alongside other investors to earn good returns. Basically, there are three types of mutual funds: debt, equity and hybrid. You can start investing in mutual funds with an amount as low Rs.500, via an SIP, and begin building your corpus to reach your financial goals. A professional fund manager takes care of your portfolio and diversifies your corpus to reduce the level of risk.

You can claim tax deductions up to Rs.1.5 lakh under section 80C when you invest in ELSS mutual funds that have a lock-in period of just 3 years. This makes mutual funds a great option if you want to enjoy the benefits of compounding and can afford to invest aggressively. However, in the event of a market crash, adjust your investment according to your risk appetite and stay invested for a longer term to earn returns.

Real estate
The property market is picking up and is expected to grow in the near future, so investing in property will help you earn high returns. Owning property lowers the risk factor as seen with other financial instruments and allows you to earn a passive source of income by renting out space.

Invest in real estate after careful consideration of the neighborhood, amenities, infrastructure and predicted increase in value. When investing in property, seek professional guidance and make purchases based on property value and do not simply decide based on the cost. Buying a property that has a high appreciation is worth the extra cost.

Provident fund
Provident funds are amongst the most traditional, oldest and safest investment options in India for the salaried. If you have invested your money in a PPF, then you are sure to earn good return at the time of maturity, which extends up to 15 years without any risk.

A PF account can be easily opened in any bank or post office nearby. You can select the one that is more convenient for you and enjoy tax benefits on your investment and on your earnings. Currently, the interest on a PPF is approximately 8%.

Now that you know the benefits of different investment options, you can compare them to identify a scheme that best suits your needs and yields good returns. For instance, you can learn why are fixed deposits better investment avenues than PPF or compare different FD interest rates and mutual fund returns to determine which investment offers you safety alongside growth.

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