Top 7 Investment Options For Salaried Employees: Money Matters

In today’s world, salaried employees often wonder how to make the most of their income - their hard earned money. With numerous investment options available in the investment market, how can one determine which are best suited for good earners who want to build wealth without taking extra or excessive risks to have a secured future? To help you know more about this, here are some of the top investment options that align well with a salaried income structure:

7 Best Investment Options For Salaried Employees

1. Mutual Funds

Mutual funds are a popular choice for salaried individuals seeking to invest with moderate risk. They pool money from various investors to invest in a diversified portfolio of stocks, bonds, or other assets. For salaried employees, mutual funds offer the advantage of professional management and diversification, reducing individual risk. There are various types of mutual funds equity, debt, and hybrid allowing investors to choose according to their risk tolerance and financial goals. Systematic Investment Plans (SIPs) within mutual funds are particularly attractive, enabling monthly investments that align with a salaried income cycle.

2. Employees’ Provident Fund (EPF)

For employees in many countries, the Employees’ Provident Fund (EPF) is a compulsory savings scheme, where both the employer and employee contribute a portion of the salary. According to the Ministry of Labour & Employment, “It is an Act to provide for the institution of provident funds, pension fund and deposit-linked insurance fund for employees in factories and other establishments.” The long-term nature of EPF savings ensures that employees build a substantial retirement corpus, and the tax-free withdrawals upon retirement add to its appeal.

3. Stock Market Investments

Investing in the stock market can be profitable, but it requires careful planning and risk management. Salaried employees with an appetite for higher returns might consider investing in stocks. Diversifying investments and researching companies thoroughly can help mitigate risks. For those new to stock investing, index funds or exchange-traded funds (ETFs) offer a diversified approach without needing extensive market knowledge.

4. Fixed Deposits (FDs)

Fixed Deposits are a safe and straightforward investment option for salaried employees seeking guaranteed returns. Banks and financial institutions offer FDs with varying interest rates and tenures. The fixed interest rate and principal protection make FDs a reliable choice, though they typically offer lower returns compared to other investment options. If you are a salaried employee you can choose an FD ranging from 7 days to 10 years, as per Policy Bazaar.com.

5. Real Estate

Investing in real estate can be a good option for those with a higher risk tolerance and savings. Real estate investments often require significant capital, but they offer long-term appreciation potential and rental income. Salaried employees should assess their financial capacity and market conditions before venturing into real estate.

Don't miss:Unified Pension Scheme (UPS): Salient Features, Eligibility And Minimum Pension Amount

6. Gold Investments

Gold, in the form of physical gold, gold ETFs, or sovereign gold bonds, remains a traditional and secure investment, as per Aditya Birla Capital. It offers a hedge against inflation and currency fluctuations. For salaried employees, gold investments can be a small but valuable part of a diversified portfolio.

Don't miss:Expert-Recommended High-Return Investment Plans You Must Know: Money Matters

7. Capital Guarantee Plans

Salaried employees can invest in Capital Guarantee Plans, “To get 100% of the invested money back at the end of the policy term. The plan offers the safety of capital along with any market-linked returns you earn at maturity”, as per ICICI Bank. With Capital Guarantee Plans, your initial investment is assured to be returned, no matter how the market performs. Salaried individuals can enjoy tax benefits on the premiums paid under Section 80C of the Income Tax Act, of 1961. Additionally, you can benefit from tax exemptions under Section 10(10D) of the IT Act.

Note: Make sure to consult a financial advisor before making any investment-related decisions.

For more such stories, stay tuned to HerZindagi.

Image credit: Freepik