Five simple ways to make your money work for you

Leaving money in a bank account idling away is an unforgivable waste of your money’s potential. In fact, the only growth you will experience is the increase in your sense of regret for not educating yourself and taking action. There are so many great products available and a lot of literature. Here are five ways to earn steadily by investing money and their implications:

Liquid Funds | Expected Returns: 6-8% | Liquidity: Same day or next day | Flexible with no lock-in, no entry or exit loads, fast access to your money, low-risk investments. Gains taxed at normal rates - the same you pay on your bank. Available online and quick to execute investment. Add money in or take it out as you wish.

Fixed Deposit | Expected Returns: 3-7% | Liquidity: Same day BUT check for penalties | Fixed deposits are very conservative and low growth options. Some banks are starting to offer better interest rates and no penalty to your money if you do need to break the term earlier. These are good for people with absolutely no risk tolerance and with a desire to do a lot of constant planning of when they will need their money, when they have extra money to be fixed in a deposit, and being disciplined to make a deposit on time and break it so checks don’t bounce.

Equity | Expected Returns: Open-ended range | Liquidity: Next day | One of the best ways to turbocharge savings to build wealth. Invest regularly via a monthly SIP option to balance out market fluctuations, to encourage further growth and savings as well as remove a lot of stress in needing to analyse the state of the market each month. Equity has higher potential and with that comes higher risk. Tax rates from gains are some of the lowest across all asset classes.

PPF | Expected Returns: 7% | Liquidity: Fixed for a long minimum term | Traditionally popular and currently at the lowest rate of return since the ’80s. The benefit: interest earned holding a sovereign guarantee and the tax-free returns hold appeal for some. Rules around the number of deposits per year as well as maximum and minimum deposits won’t work for anyone wanting flexibility.

P2P Lending | Expected Returns: 18-26% returns | Liquidity: Based on the term of the loan you offer | The initial investment can be low. Diversify your risk across many different loans and risk levels rather than making a single loan. Earn back part of your investment, both principal and return every month. Just remember that selection of who you loan to is crucial as there is no insurance available.