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Investment Ideas for Women in India

dateKnowledge Centre Team dateFebruary 14, 2022 views134 Views
Investment Ideas for Women

The world is changing for the good. Gender disparities in the work front are slowly but steadily diminishing as more and more women join the workplace. Though there is a fair share of working women in developed countries, developing countries such as India are also catching up.

The participation of women in the workplace has been growing steadily across the world. In any case, whether you are earning or running household, knowing how to invest money is always useful. There are several reasons why you should know how investment works and how to use it for your benefit. So, here’s women’s guide to investing:

Why Women Should Start Investing?

Since the working population of women is rising, it has opened the doors of investment for women. Investing is now more of a necessity for both men and women.

Reasons Women should Invest | Financial Planning for Women

Here’s why you should start too.

1. Financial Security

Investing regularly helps you create a corpus for yourself. These not only help you to achieve your goals but also provide you with a cushion to fall back on at the time of emergencies.

2. Support Family Goals

Long-term family goals such as buying a house, buying a car, need huge sums. Salaries and savings in the majority of the cases are not enough. For you to achieve these goals, proper investment is necessary.

3. Look After Parents

No one likes to see their parents old, but such is life. As your parents grow old, they will require your help both mentally and financially. Investing will make sure you do not have to delve into your salary.

4. Ensure a Bright Future for Children

A good education is the first step towards a good future. With the cost of higher education rising with each passing year, you need to make sure that you invest now so that you can ensure a good education for your child.

Best Investment Ideas for Women

Now that we have learned why investing is important, you must now be thinking about the options in which you should invest. Don’t worry we got you covered.

These investment ideas for women are broadly classified into 3 categories

1. Fixed Income Investments

2. Market-Linked Investments

3. Wealth and Legacy Investment

1. Fixed Income or Safe Investments

These are the safest type of investments. As the name suggests, these investments provide you with a fixed type of return. That is, you are aware of the returns you will be getting.

Your money is invested in low to zero risk instruments to provide you with stable returns. The most popular investments are:

Investment Features Tax-Benefit
Public Provident Fund (PPF)
  • It is the most popular and risk-less investment. PPF scheme is backed by the government.
  • It offers you an attractive interest of 7.1% p.a
  • The maximum time you can invest is of 15 years
  • You cannot invest more than Rs 1.5 lakhs in a year
  • You can even withdraw your money partially after the 3rd year
Investment, Interest & Maturity all exempt from tax
National Savings Certificate (NSC)
  • It is another government-backed instrument that offers you guaranteed and fixed returns
  • You can earn an interest of 6.8% p.a
  • It has a lock-in period of 5 years. That is, you cannot withdraw your fund before 5 years.
  • You can invest in NSC through any post-office
Investment is deductable. Interest Income is taxable
Employee provident fund (EPF)
  • It is a scheme wherein the employer and employee both contribute 12% of the basic salary
  • Women are required to contribute only 8% for the first 3 years of employment
  • Earn an interest rate of 8.5% in an EPF.
Yes (if the annual investment is below Rs 2.5 lakh)
POMIS
  • It is a low-risk scheme that will provide you with steady returns monthly
  • Duration of 5 years
  • POMIS scheme allows you to open a joint account. Thus, you can open this with your partner as well
  • You can invest up to Rs. 4.5 lakh (Rs. 9 lakh if you have a joint account)
No tax benefit
Guaranteed Savings Plan
  • It is a type of investment that offers you a guaranteed sum at the time of maturity
  • This invests in low-risk securities
  • Guaranteed Savings Plan comes with a life cover as well, i.e., if you die during the plan, a sum assured will be provided
Yes, Investment, Interest & Maturity are all exempt from tax

Guaranteed Savings Plan from Canara HSBC Life Insurance not only offers you guaranteed returns at maturity but the following benefits as well

  - Freedom to choose your premium payment term

  - Premium Funding benefit that makes sure that your family’s goal is met by continuing the policy even after your death. The remaining premiums are waived off.

  - Premium and wealth booster benefits

2. Market-Linked Investments

These investment options are best for the growth of your money when you can invest for the long term. The return on these investments is linked with the market’s performance of your assets.

Investments Features Tax
Mutual Funds
  • It is an investment fund that is made by pooling money from a large number of investors
  • It is a good option for you if you are a first-time investor as this fund is managed by a professional
  • There are multiple types of mutual funds such as Equity Mutual Fund, Debt, etc.
  • You can enter and exit from a fund at your choice
Only ELSS offers deduction on invested money
Unit Linked Insurance Plan (ULIP)
  • It is a variant of life insurance that provides you with an opportunity to invest well.
  • ULIPs offer you multiple funds to invest in.
  • You can stay invested as per your goal

    Withdrawal
  • ULIPs have a lock-in period of 5 years during which you are not allowed to withdraw.
  • Partial Withdrawals are allowed in ULIPs
Yes, benefits available u/s 80C and 10(10)D
National / New Pension Scheme (NPS)
  • It is a government-backed long-term investment plan
  • It is an investment specially designed for retirement
  • Once invested, you can avail your corpus only after you retire

    Withdrawal
  • You can withdraw a maximum of 60% of your funds. 40% is to be invested in the PFRDA scheme
  • 25% of withdrawal allowed for special considerations
Yes, benefits available u/s 80C and 80CCD

Invest 4G

This ULIP from Canara HSBC Life Insurance also comes with the premium funding benefit. Other features it offers:

  - It provides you with free switches. That is, you can switch between funds at no extra cost*

  - You can make use of any of the 4 portfolio management techniques. This ensures that your fund will be managed without you needing to intervene

  - You can also choose the century option and get covered till 100 years of age!

3. Wealth and Legacy Investment

Legacy investments help you create and pass on the wealth. You can use these investments, to leave a legacy as well. Here are some investment options.

Investments Features Tax
Whole Life Insurance
  • Type of life insurance which provides you life cover for up to the age of 99
  • These are of 2 types

      - Regular pay: This requires you to pay your premium for as long as you live

      - Limited Pay: In this method, you have to pay your premiums only till 60
Yes, Investment, Interest & Maturity are all exempt from tax
Real Estate
  • This is the most popular investment to leave a legacy
  • Real Estate includes investment in land, buildings, etc
  • Real Estate is one of the few investments that can easily combat inflation
  • Women investors can be given preference and 1-2% of discount on stamp duty
Tax benefit only on purchase using a home loan
Gold
  • It is one of the oldest types of investment and most popular among women.
  • Gold is one of the safest instruments to invest in
  • It can also beat inflation
No tax benefit on physical gold but ETFs get better tax treatment

Investments are tools to reach a better future financially. So, use investments to not only build your and your family’s future, but also to safeguard it. Use the long-term investments such as ULIPs and Guaranteed Savings Plans, PPF, etc. to build long term wealth. Use term insurance plans to protect your financial contribution to your family.

Click Here To Learn - Best Ways to Invest Money

Click Here to use Term Insurance Calculator

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.

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