Mutual funds have gained popularity over the last two decades. However, for the average investor, particularly the salaried class, investments in mutual funds have been mostly in equity mutual funds. For lower risk investments, bank FDs have remained the top choice compared to the other type of mutual funds – debt mutual funds.
Debt mutual funds function the same way as equity mutual funds, however, as the name suggests, they invest in various debt and fixed income products. These include various bonds, treasury bills, corporate deposits, government securities and money market instruments.Sounds complicated? Let us limit ourselves by understanding that they lend money to various borrowers and earn interest on the money lent. The borrowers are the Government, which is one of the largest borrowers, and various corporate bodies. These borrowers issue “receipts” for the money they have borrowed, which are called bonds, certificates, securities, etc. Continue reading “Debt Mutual Funds – A better alternative for low risk Investments”
Life is uncertain. No matter who we are or what we do, no one knows what the future holds. Although we all want to live a long life, death is the only certainty in our lives, albeit an unpleasant one. Now imagine, what if we were to die early? When we are still in our working lives, having dependents, mouths to feed, loved ones to care for? Sounds scary, but can we be certain that we won’t? Many people have died early, due to illness, accidents, calamities. We cannot do much about the mental agony and emotional turmoil our loved ones will have to go through, but can we at least secure them financially? Life insurance exists exactly for this purpose. Continue reading “Who should buy Life Insurance”
I know most of us already know what insurance is, and probably already have insurance policies. However, just to be sure that we are on a common ground, I will briefly touch upon the subject.
Insurance is a risk cover. It is a fallback source of funds in case of any exigency. An insurance policy is a plan wherein you have to pay a certain amount to get yourself covered financially against the risk. Usually the cover is much higher than what you have to pay. The most common types of insurances are Life, Health and Motor Insurances. Continue reading “Insurance – An overview”
Suppose you come into a substantial amount of cash that you don’t need right away. What do you do with this surplus fund? Being an informed investor, you know that you should invest it. However, with the plethora of investment options available, it can be quite challenging to choose the right investment. After all, you don’t want to lose money or make lower returns, do you? So while you take your time researching your options and deciding upon the best investment, your money sits idle in your bank account, doing nothing. Continue reading “Where to Invest your Surplus Funds”