How Working Women Can Make Their Money Work for Them?
Women are now independent – earning for themselves and managing their own funds and investments. This has pushed growth of new investment options for women, which can help their hard-earned money grow and multiply. Every working woman should cultivate the habit of finding an appropriate investment option for herself to generate higher returns and to expand her savings.
Open a Fixed Deposit
Fixed Deposit is a tested and trusted investment option for the protection of your capital and assured returns. Nowadays, the interest rate for FD is rising due to RBI’s benchmark rate policy. NBFCs offer a higher interest rate than a bank deposit, with MAAA rating from CRISIL, indicating the highest security of capital and repayment.
Woman FD comes with two options – cumulative and non-cumulative. Under the cumulative option, at a fixed interval, the interest is added into the capital amount; hence you can get the advantage of the compounding interest to let your money grow. If you want regular income, you can choose the non-cumulative option. Under this option, interest will be paid out at pre-defined regular intervals. You will have an opportunity to choose the interest pay-out interval as a monthly, quarterly, half-yearly or yearly option.
The FD has an additional advantage: Even if you have chosen a tenor of two to three years, you are allowed to withdraw money anytime from your account, with a minimal penalty charge. The alternate way is to take a loan against your FD with minimum documentation and cost. Hence fixed deposits can work as an emergency fund for working women.
Invest in PPF Account
The PPF (Public Provident Fund) is a long-term investment plan for your retirement. Working women can open PPF account in any post office or bank for 15 years. You can deposit any amount from Rs. 500 to Rs. 1.5 lacs in a particular financial year. You can make a maximum of 12 contributions in a year. The most significant advantage with PPF is, you can start saving with a small deposit amount, with as little as Rs. 500. The interest is added to the principal amount annually.
The limitation of PPF is that your money is blocked for 15 years, although partial withdrawals or loans are allowed after certain years. You can consider investing your surplus money in PPF, if you do not need those funds in the next five years. At present FD interest rates are considerably higher than PPF, you can invest in FD now and transfer maturity amount into the PPF account after one or two years. You can use this option if you are not in a higher income tax slab.
Invest in Equity Mutual Fund
Women with a higher salary income can consider investing in equity mutual funds through SIP (Systematic Investment Plan). Equity investment is considered as the most efficient way to grow your money in the long-term. However, return from equity is not guaranteed and is subject to risks that market is exposed to. For the short term, you may also have negative returns if the stock market is volatile. To calculate and compare the returns from mutual funds and FD, you can use SIP calculator and FD calculator available online.
Sukanya Samriddhi Yojna
As a working woman, if you have a daughter younger than ten years, she can consider opening an account under the government scheme ‘Sukanya Samriddhi Yojna.’ The scheme aims to generate the corpus for a girl child’s education and marriage. This is one of the best investment options for a woman to gift to her girl child. The working women can contribute any amount between Rs. 1000 to Rs. 1,50,000 in a financial year. You also have the flexibility to withdraw funds whenever needed. You can use an online FD calculator to know maturity amount and interest that you can earn on your investment.