There are plenty of investment options for the Indian woman to choose from; it all depends on how much market risk she is willing to take.

Where can the Indian woman invest her money smartly

Savings and investments help one to achieve long-term financial freedom, and also provides security for the family. Women in India form 23% of the national workforce. Although this is much lower than in other Asian countries like Indonesia or Sri Lanka, it still accounts for nearly a quarter of the population. 

As a woman, setting aside a portion of your income for saving and investing is very important. But it’s not something that only working women can consider. Home-makers are just as crucial to the financial planning of a family as those who are employed full-time.

Banks and other financial institutions offer various women-centric products, be it savings bank accounts or loans for women entrepreneurs. Similarly, the government too has various financial schemes targeted at Indian women. However, when it comes to saving and investing, women are known to have an affinity for traditional instruments like fixed deposits and provident funds. Unsurprisingly, gold is another preferred investment option. 

Having said that, the likely choices of financial instruments are almost the same for both men and women. Let’s look at some of them and how they can benefit the financial future of the Indian women.

  • Public Provident Fund – PPF is popular in India as a very low-risk investment. It is a 15-year scheme that is made available through banks and post offices. Presently it bears an interest income of 7.1%, which is exempt from income tax. Housewives with very minimal savings can invest in PPF as its investments start from just Rs 500.
  • Employee Provident Fund – Working women can avail of the benefits of an EPF investment through their employer. Women employees have the additional advantage of having to pay only 8% instead of 12% of their salary towards the EPF. Moreover, contribution to EPF of up to Rs 1.5 lakh can be claimed as a deduction while filing your Income Tax returns.
  • Kisan Vikas Patra – Available in post offices, KVP offers interest rates similar to PPF. However, it is available in the form of certificates that currently double the investment in 124 months. It is an attractive option for women who are looking to invest a lump sum and double it in around 10 years.
  • National Savings Certificate – NSCs mature in five years and are ideal for short-term lump sum investments. Notably, interest rates have fallen en masse across all instruments after the government lowered it in the early days of COVID-19. At present, it is 6.9% per annum. 
  • Fixed deposits – This is another long-term investment where you can pick your preferred investment duration. It is offered by banks and other financial institutions and the interest rate, while not too high, can vary across organisations. 

Related: 5 Women-specific financial products you must take advantage of today

  • Recurring deposits – Although the interest rate with RDs is not that high, it is ideal for women who plan to save small amounts every month. You can choose a tenure as per your convenience and earn better interest income than with a savings account.
  • Women-specific insurance plans – Almost all insurance companies have one or more women-centric insurance products to choose from. Health insurance, for instance, provides specific coverage of childbirth-related complications, female malignancies like cancer of breast, ovary, uterus etc. 
  • National Pension Scheme – Available as a separate tax-free investment under income tax, NPS is designed solely to sort out your post-retirement finances. You can withdraw up to 60% of the corpus on retirement or use it as annuity like the remaining 40%.

Related: Why should women invest in debt funds?

  • Mutual funds – If you don’t want to miss out on the market growth, a mutual fund is one of the safer ways. There’s no need to worry about market trends; expert fund managers invest your money among equity and debt instruments to maximise returns. Even if you are not a working woman, you can make regular contributions through a Systematic Investment Plans (SIP).
  • Shares – Stocks are an attractive investment option because of the high returns involved. A survey by investment platform Groww revealed that 82% of women prefer investing in stocks and mutual funds. You can opt to invest in shares for long-term returns or go for regular trading through your demat account.
  • Gold – Gold is much more than a popular choice for ornaments among Indian women. It is a sound investment that helps you beat inflation and diversify your investment portfolio. Besides, gold tends to perform better during an economic crisis, such as the one we’re seeing now. So when your investment interest rates and share prices fall, gold generally protects your worth. Take a look at this quick guide to investing in gold saving schemes under MFs.
  • Real estate – A well-researched investment in real estate can bring in handsome returns in the future. It can also generate rental income if you decide to let out the property. It is, however, a big investment that is suitable only if you have a lump sum waiting to be invested. 

Last words

The importance of having control of your finances goes beyond gender equality. It secures your long-term financial future, helps you manage your tax liability better, and ensures that you get more out of the money you earn. If you are looking to create a regular income, here are the investment options just for you.