Let’s take this scenario – you have an odd ₹2 lakh sitting in your bank and you absolutely don’t know what to do with it.

 

 

a. Take advantage of the situation: If you are looking for a window of 2-3 years or so for your investment, then you can consider short term funds it will earn you more than your savings account can.

 

 

b. Go short: Ultra short-term fund provides an intermediate cash solution. You could invest in securities with maturity less than one year and you could look at something close to a week or 90 days.

 

 

c. Emergency can go liquid: In other words, you need to be able to actually convert it to cash in your hand extremely quickly.  It is considered one of the safest places to put your money for short periods of time. Think of government securities, treasury bills and commercial paper.

 

 

d. Mutual funds are a good bet: You have more variety here and it does not require spending a lot of money on it and it helps you beat inflation. There are experienced others to manage it for you; it is very convenient as you have the option of getting your money back soon.

 

 

e. Monthly income plans: Looking for a steady income then here’s your tool. MIPs invest heavily in debt instruments like debentures, corporate bonds, government securities etc. It generally has 75-80 per cent of its money in debt and rest in equity and cash.

 

 

f. Dip your toes in the deposit market: You put in money for a fixed period of time and at a fixed rate of interest. This is best for those who are starting off and are not too confident about investing.  Fixed deposit is the most popular investment option which can offer monthly, quarterly and yearly return. Did you know? SBI has substantially reduced its Fixed Deposit rates by 1.5 to 2 per cent for clients who would like to invest more than ₹1crore.

 

 

Two words of advice for the late birds:

 

 

1. Learn your lesson well: Like all things last minute are bound to spread panic, here don’t put off your investments till the end of the year when you can do it this week itself.

 

 

2. Let go off hoarding: You don’t only hoard objects and junk at home, few of us do that with money as well. So just keeping it in the safety of your bank does not do you any good, save for the paltry amount of interest it earns you. Like anything good going to waste, so is your money losing its volatility and purchasing power. That emergency you have been waiting for may not come when you expect it to so stop. Invest now.