Where should I invest?

Broadly speaking, your investment choice should be guided by two things: investment horizon and risk appetite. Always remember, your short to medium-term goals should be funded by using safe or relatively safer debt investments. This is because you cannot afford to lose money when you don't have much time in hand. Always invest in bank deposits and liquid funds for goals that have to be met within a few months or in a year. Use bank deposits and short-term debt schemes to take care of the goals that have to be met over a horizon of at least one year or more. And for long-term goals, invest in equity. Long-term is five years or more. Short-term investment options Bank deposits: They are the safest and they also offer assured returns. However, the trouble with fixed deposits is that they earn low interest and that too is taxed on an ongoing basis. Use them only for keeping contingency funds, and money needed in the next few months to a year. Company deposits: They offer slightly higher returns, but they are also a little more risky. Always stick to higher-rated deposits. Do not compromise on ratings for higher returns. Also, never put your entire investments in a single company, spread your investment across a fe

This article was originally published on May 28, 2021.