Top Five Ways to Start Investing, Starting at Rs 1,000 Per Month

Here are 5 ways to start investing even for Rs 1,000 or less every month through stocks, mutual funds, PPF & more.

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(Photo: iStockphoto)

Amid the pandemic and the lockdown, the economy is staggering. Yet, the stock markets are performing well. At the same time, investors are confused as to where they should put their money and how they should invest it – especially the small investors, who are the worst-hit by the present economic situation.

Here are some tips reiterated by experts as to how to play the trading field without taking huge risks:

• Keep monthly savings separate from trading investment
• Know that losses are unavoidable
• Invest in winner companies, those which have their fundamentals clear and strong
• Do not invest in loser companies, even if they show rapid growth initially. Steer clear of Banking and Financial sectors since they are majorly hit
• Do not put all your money in one or two stocks. Portfolios should have 25-35 stocks. Do not invest more than 2-4 percent of your money in one stock
• Do not put all your money in just equity bonds. Invest in gold, other commodities or government securities. Focus on asset allocation
• Expand your investment arenas and put money in global markets. If one country’s economy collapses, you can find retreat in another

Here are five ways to start investing even for Rs 1,000 or less every month.

Stocks

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Small direct investments of Rs 1,000 every month can create a good investment portfolio. You may not be able to purchase the costlier stocks on the market but there exists a large variety of stocks which have the potential of good returns.

Mutual Funds

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Mutual funds are an integral part of the portfolio of most investors. This situation will continue going ahead as mutual funds represent an easy and cost effective way to build a strong portfolio.

Investors though will need to exercise additional due diligence while making their investment choices. Several things that are often told to investors to lure them towards mutual funds need proper understanding and revision.

Public Provident Fund (PPF)

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Public Provident Fund (PPF) is a government-established savings scheme with a tenure of 15 years, available at most banks and post offices in India. Its rate changes every quarter but is currently 8 percent. The interest on PPF is tax-free.

Open a NSC Investment with Any Indian Post Office

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A National Savings Certificate has a tenure of 5 years and a fixed rate of interest. You can open an NSC account with any post office. The interest rate is currently 8 percent. The interest on NSC is also automatically counted towards the Rs 1.5 lakh 80C limit and is tax-deductible, if no other investments are using up the limit.

Recurring Term Deposits

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Most banks allow customers to deposit a fixed amount every month and earn internet rates application to deposit accounts. The interest currently ranges from 3-9 percent per annum. Term deposits is a step towards instilling a habit of saving and investments are zero risk.