What are the investment options suitable for self-employed individuals?
Self-employed professionals and individuals will not have a smooth cash flow, just like salaried professionals. They may use most of their savings for business investment purposes, which it is hard for them to see returns in quick time.
Moreover, self-employed professionals do not have or invest in EPF (employee provident fund) and other associated employment pension benefits. They need to depend on their savings to protect their post-retirement future completely.
As a self-employed individual, you have a lot of investment options in recent years. Some of the best investment options are described below:
Bank fixed deposits:
Though you want to invest for a short or long time, bank fixed deposits remain as the best option. It has guaranteed interest income along with principal repayment. When you are booking the fixed deposit, you would clearly know how much to invest and how much you will get back after the tenure period. There will be slight changes only when the rate of interest varies. It is a safe investment option though the rate of interest is less. It is best to choose a senior citizen plan since you can get additional benefits.
Debt mutual funds:
It is best to invest in income securities that are fixed like government and corporate bonds, certificates of deposits, treasury bills, commercial papers, and various debt instruments. As most of the debt funds are associated with market trends and changes, they do not completely offer guaranteed returns and capital protection. However, the best part of these funds is it generates better return rates. It is higher than the savings account and bank fixed deposits.
National pension scheme:
NPS or national pension scheme is a market associated solution focused on retirement planning. It is possible for self-employed individuals to join this structure. They can join under the Citizens of India scheme and continue contributions any time they wish in an economic year. The subscribers are free to withdraw about 60% of their investments on maturity; however, the remaining investment should be compulsorily reserved for a post-retirement annuity.
Other investment options for self-employed individuals include Public Provident Fund or PPF, ELSS Funds, and Equity Mutual Funds. There are a variety of options for self-employed individuals. It is necessary to determine your goals and decide the type of investment you wanted to make. A person who is purchasing a house can choose the best investment option after 5 or 6 years. You can choose a plan that has less liquidity.
