If you want to secure your future, you will have to invest for it. But how much profit your investment will make you depends on your understanding of investment. If you invest anywhere by listening to someone, you can incur huge losses. Here are 5 things which are very important to consider before investing.
First understand for what purpose you are investing
First ask yourself the purpose for which you want to invest. If you think that you may need the invested amount anytime, then you can invest in RD, Debt Fund etc. and take advantage of the interest on it in the short term. If you have a lump sum amount, then you can also invest it in fixed deposit for 1, 2 or 3 years as per your need.
Before investing, definitely check the lock-in period
Many savings schemes come with a lock-in period. You cannot withdraw the money during this period and if you do, you have to pay a penalty. So keep in mind how long you want to invest. Pay special attention to whether the scheme you are investing in has a lock-in period and if so, what is the lock-in period.
Assess how much risk you can take
Assess for yourself how much risk you can take on your investment and how much you cannot. Do not invest your money anywhere by listening to others, otherwise you can incur huge losses.
Find out about the scheme where you are investing
Whatever scheme you are going to invest in, first get complete information about it. Do thorough research on it. Investment made with incomplete information can cause you losses.
It is important to compare investment options properly
You must compare the options for whichever you are investing, be it long term or short term, and then decide where you want to invest. Before investing, you should see how much return each scheme has given in the past years. Whether your investment in that scheme is safe or not.
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