Investment options

Banks
Banks are considered as the safest of all options. A person who deposits some amount in the bank earns interest from it. The two main modes of investment in banks, savings accounts and fixed deposits have been effectively used by everyone. However, today the interest rate is declining and inflation rate is increasing day by day. With the banks offering only 8 percent in their fixed deposits for one year, the yields have come down substantially in recent times. On the top of it the inflation continues to play spoil sport. The inflation is creeping up, to almost 6 percent at times, and this means that the value of money saved goes down instead of going up. This effectively mars any chance of gaining from the investments in banks.

Post Office schemes
Post offices in India offer the highest rates of interest. For those who have safety on their mind, they can put some amount in these schemes. In terms of service, post offices have yet to prove themselves. Due do the factor of safety post offices hold major chunk of peoples investment. The term is usually 15 years. Any individual can open a PPF account in any nationalized bank or its branches. The minimum amount to be deposited in this account is Rs.500 per year. The maximum amount one can deposit is 70,000 per year. There is no fixed rule to deposit the amount. One can deposit monthly, quarterly or even at one go. The entire balance can be withdrawn on maturity that is after 15 years. It can also be extended by another 5 years.

Gold
Gold has always been a traditional form of investment and is liquid. Though it has given less return as compared to mutual funds, gold falls altogether in a different category. From investment point of view gold is the most liquid as compared to PPF, LIC and company deposits. Gold bars, coins are available in various denominations such as 1gm 3gm 10gm etc for investment.

Shares
In the past only selected people used to invest in the share market but with when the Indian share market started raising since 2004 many people joined the bandwagon in order to make a quick buck. Share markets are only for those who wants to stay invested for more than 10 years. People with short-term horizon should stay away from this adventure.

Mutual Fund
Mutual funds are managed by fund managers who invest money on behalf of the investors. Money is invested in a number of companies in order to reduce the risk. Those who don't have much knowledge about the share market can take the mutual fund route to invest their money in the share market.
Life Insurance
Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against. In case of anything unfortunate, the policy amount is paid to the nominee.
Life Insurance comes to the timely aid of the family in the unfortunate event of death of the breadwinner. The yield normally is around 7-8%. There are various schemes in LIC which one can consider according the needs.

Company Fixed Deposits
Just like Banks Company fixed deposits offer interest on investment. Companies have used fixed deposit schemes as a means of mobilizing funds for their operations and have paid interest on them. Investing in company fixed deposits is not completely safe. There is always a risk of capital erosion. Secondly, Liquidity is also a major problem. Premature redemption attracts penalty.