In this guide to investing for beginners for Indian women investors, you’ll learn how to invest money wisely so you can achieve financial independence.
Every woman needs to learn how to invest money for the best returns in order to achieve financial independence. Do you have questions about investing for beginners?
Perhaps you want to know how to invest money for a down payment in a home loan or where to invest money for long-term earnings.
You may be keen to learn about saving for retirement or require advice on what is the best investment for the future, or how to invest money for your child.
You may even want to know how to buy stocks for beginners, or what is the best way to invest money for short term, quick profits, or which is the best investment plan with high returns in India.
There are so many investment choices available today that it can be confusing to know what is the best investment to get a monthly income, or how to invest money for high returns in India.
A Guide To Investing For Beginners For Indian Women Investors
In a live expert session on SHEROES, Neha Misra, CEO & Co-founder of The Fin Lit Project, an IIT-Delhi incubated startup, answered a number of investment questions on how to start investing money for beginners.
Neha has a decade of experience in technology and finance and has worked for corporates and startups in India and the USA, including working at Wall Street, New York.
She is also a mentor for the IIT Madras Alumni Association, SHEROES-Google Internet accelerator, and the Oxford University Women in Business.
In this session, Neha Misra, CEO & Co-founder Of The Fin Lit Project answered questions on investing for beginners to help SHEROES app users learn how to invest money for the best returns.
This women investors guide to investing for beginners will show you how to invest money wisely. You’ll also get tips on how to start investing in stocks for beginners, how to invest in gold, how to invest in cryptocurrency and more.
- What is the best investment for beginners?
The best way to invest money for beginners is to get acquainted with financial jargon and learn the meanings of simple terms, like Public Provident Fund (PPF), Demat, Equity, before you take the leap into investing money.
Define your goals and priorities in terms of holidays, parents, education, travel, and then start saving and investing for these goals. To get started, use safe investments like PPF, and then slowly get into mutual funds, and then equity.
For more information, read this article on becoming a first-time investor. You can reach out to us or a SEBI-registered advisor to help you get started.
- When is the right time to start investing? And what should be the ideal amount to start investing?
The best time to learn how to start investing is in your early twenties or whenever you start earning money. That doesn’t mean you’ve lost too much time if you didn’t start earlier.
But, the best time to take the plunge is, ideally, today. This is because investing offers the power of compounding, and the sooner you start, the more benefit of compounding you get.
The ideal amount to save and invest in the beginning, in total, is about 10% of your earnings. Risk Diversification is a key concept so it’s best to spread your investment across safe instruments, low-risk, and high-risk investments to beat inflation.
- Which is the safest way to invest money?
The safest way to invest money is in small savings. KVP, NSC, Sukanya Samridhi, PPF, are all great savings options in India.
- What’s the best way to buy term insurance?
Term insurance is a great product. There are many platforms to buy insurance. You can buy the insurance directly to avoid paying commissions but make sure it is enough to cover your family’s expenses, in case something were to go wrong.
- How to invest in gold, mutual funds, and equity?
Gold can be physical or digital. Sovereign Gold Bonds (SGBs) are advisable due to sovereign guarantee if you do not want to store gold physically.
For mutual funds, you can buy them directly from the Asset Management Company’s (AMC) website or through your Demat account.
To buy equity, you’ll need a Demat trading account. That also gives you the advantage to track all your holdings, including mutual funds, in one place.
Choose a broker – discount or full-service – and then open your Demat account according to your needs. Learn how to invest in the stock market for beginners.
- What is the best way to invest in mutual funds?
The best way to invest in mutual funds is to do it directly. Mutual funds can be bought directly from the AMC platforms or through your broker.
Define your goals and pick mutual fund categories that align with your goal. For example, Blue Chip mutual funds (generally invest in large-cap companies) are good for an investment horizon of more than 5 years.
Buy direct and Growth for capital appreciation and long-term growth. While investing, remember to check the total expense ratio to make sure you’re not paying too much out of your earnings. Read this article on demystifying mutual funds in India.
- Are gold bonds more profitable than buying physical gold?
Gold in either form is an asset. When you buy physical jewellery, you have to pay making charges, which you do not have to pay for Sovereign Gold Bonds (SGBs).
In addition, SGBs give you 2.5% over the market value when redeemed. However, they do come with the risk that is attached to any market instrument. So, define your goals and then choose the best option for buying gold.
- If I have money in gold and fixed deposits (FDs) should I put it into mutual funds instead?
It’s riskier to invest all your money from gold and FDs in mutual funds. Instead, you can start investing in mutual funds with a systematic investment plan (SIP) of just INR 500.
Once you’re more comfortable with investing, you can increase the amount of your SIP purchase.
- How to invest money for your child?
Remember to save money at the beginning of the month, starting with 10% of your family earnings.
When you invest money for your child, keep in mind that, if you have daughters, Sukanya Samriddhi is a good way to start. For boys, separate investments can be done.
- I want to invest more in equities, but don’t get time to study market trends. Are there any expert advisors who offer this service?
If you want to learn how to make money in the stock market for beginners, the best investment experts are SEBI-registered Investment Advisors. You can find the detailed list on SEBI’s platform.
When you invest on your own with help from a financial expert, not only do you become financially literate, but you will also gain confidence in learning how to start investing in stocks for beginners.
If you’re learning how to invest in share markets or how to make money in stocks for beginners, remember that the best time to buy is when things are low, and vice versa.
When buying stocks for beginners, remember that blue-chip stocks are the safest to get started with, but TIMING & TIME are both crucial when investing in stocks and equities.
- Do I need both Demat and Trading accounts to buy shares and stocks?
Shares and stocks are the same thing and imply ownership of a company. Even if you buy 1 stock of a company, you become a part-owner of the company.
To buy shares, you need both Demat and Trading accounts. Demat means dematerialized – this is an electronic locker to store your shares.
A Trading account is connected with your bank account and you can transfer money to buy shares into this account.
You can open these accounts through any SEBI-registered broker. All you need is your PAN card and Aadhaar card.
Remember, becoming financially literate is an ongoing process, and studying how to make money in the stock market and how to start trading stocks is as important as becoming an investor.
- How do I compare brokerage fees? What is the average charge?
Most discount brokerages do not charge any fee for Delivery or Long term investing. The general average for trading is between INR 20 to 30 for discount brokerage and about 0.01% for Full-Service brokers.
Remember, for long-term investing, use *Delivery* or *CNC* as order type and you will not be charged anything if you are using a discount broker.
- Can we open a National Pension Scheme (NPS) account via a Demat platform?
If your Demat is with a banking partner, that is also a Point of Service for NPS and the same can be used.
However, if you’re dealing with discount brokerages, then a separate NPS tier-1 and 2 account will have to be opened.
When you open an NPS, a Permanent Retirement Account Number (PRAN) is opened along with your name.
- How should I invest money for retirement?
For retirement, the ideal pattern is a majority in safe instruments to avoid risk, 20 to 25% in bonds or fixed income instruments, 10 to 15% in large-cap equity instruments to help you get the market advantage.
- Bank FDs and other bank products give low-interest rates. Where should a retired person invest lump sum money for a better interest rate?
For retired individuals, bonds and debt mutual funds offer good returns. Bonds with fixed interest rates that are AA or above rated will give you better returns.
Other investment alternatives to fixed deposits are PPF, Covered Bonds, and Mutual Funds, depending on your risk appetite and investment horizon.
- I need to spend one lakh rupees on expenses. Should I take a loan or use my savings?
This is an excellent question. Taking a loan does not give you leverage. You can use the right mix of loans plus savings, as you should always have some savings in times of emergencies.
Make sure you check the interest you’re paying on the loan. For example, if you end up paying 18% interest, that is a very high rate of interest to pay.
- How to invest in cryptocurrency and what are the platforms for it?
There are 7 major crypto exchanges in India. Some of those are wazirX, founded by Nischay Shetty, and CoinDCX.
However, Cryptocurrency is still not regulated and accepted by the government, hence it is a highly, highly risky investment and not something we suggest getting started with.
Now that you’ve learned how to invest money for the best returns in this beginners guide to investing you can read more expert investing tips for Indian women.
Keep learning how to invest money wisely and get familiar with the best investment plans with high returns in India so you can become a savvy woman investor.
Also read these investing tips on:
- How to invest in gold online
- How to invest in real estate with little money
- Expert tips on personal financial planning for women
- Financial planning for working women at different life stages
Disclaimer: The ideas and strategies on this website are based on personal opinions. They do not and should not be considered as professional financial investment advice and should never be used without first assessing your own personal and financial situation, or without consulting your professional investment advisor. All investments, including real estate, are speculative in nature and involve a substantial risk of loss. We advise you to do your due diligence before acting on any information that we publish and do not, in any way, warrant or guarantee the success of any action you take in reliance on our statements or recommendations.