Recent systemic failure of big banks of United States of America, India Switzerland and banks of many other countries like Signature Bank, Silicon Valley Bank (SVB Bank), Silvergate Bank, Credit Swiss, Yes Bank etc. indicating that there is need to have alternative saving & investment options to safeguardyour hard earn money. So, we all should have knowledge of all other alternative options to save and invest money.
Here is the list of 10 safest investment options with very high liquidity where you can save and invest your hard earned money. These investment options also have very high level of liquidity so you can withdraw your money as and when you need it.
1. Fixed Deposits (FD)
Fixed deposit in banks is safe investment option but FD should be in very stable and big bank.FD investment in bank is insured up to some fixed amount, so do FD up-to that amount only to safeguardfrom any bank failure.
Also, do bank FD only when the return of bank FD is greater than inflation rate. If the rate of inflation is greater than FD then there is no sense of doing FD.
There are several benefits of investing in a Bank Fixed Deposit (FD). Here are some of the key benefits: Overall, Bank FDs can be a good investment option for those looking for a low-risk, fixed-income investment that offers guaranteed returns and high liquidity. However, investors should also consider other investment options based on their financial goals, risk appetite, and investment horizon. How to do Bank FD? Here are the steps to invest in a Bank Fixed Deposit (FD):Benefits of investing in a Bank Fixed Deposit
How to invest in a Bank Fixed Deposit
- Choose a bank: The first step is to choose a bank where you want to invest your money. Consider factors like interest rates, safety, and reputation of the bank before making a decision.
- Check theinterest rates: Once you have selected the bank, check the current interest rates offered on FDs. Different banks offer different rates, so compare the rates offered by various banks to get the best deal.
- Decidethe tenure: Determine the tenure of the FD you want to invest in. Banks usually offer flexible tenures ranging from a few days to several years.
- Calculate the interest and returns: Use an FD calculator to calculate the expected interest and returns on your investment based on the interest rate and tenure.
- Open an account: If you are an existing customer of the bank, you can open an FD account online or visit the branch and fill out the necessary forms. If you are a new customer, you will need to open a savings account first before opening an FD account.
- Deposit the funds: Deposit the funds in the FD account either online or at the bank branch. The bank will issue a receipt confirming your investment.
- Monitor the FD: Monitor the FD and keep track of the maturity date. You can choose to reinvest the money or withdraw the principal amount and interest once the FD matures.
Investing in a Bank FD is a simple and hassle-free process. You can also renew the FD automatically or manually, depending on your preferences.
2. Treasury Bill (T-Bill)
Treasury Bill (T-Bill) are also very safe investment option.A Treasury Bill, also known as T-Bill, is a short-term debt security issued by the government of a country, usually with a maturity of less than one year. These securities are sold at a discount to their face value, and the difference between the purchase price and the face value is the investor's return.
Treasury Bills are considered to be very low-risk investments, as they are backed by the full faith and credit of the government. They are also highly liquid, as they can be easily bought and sold on the secondary market.
In the United States, Treasury Bills are issued by the U.S. Department of the Treasury and are typically sold in denominations of $1,000 or more. They are often used by investors as a safe place to park cash, as well as by the government to finance short-term expenses.
In India, Treasury Bills are also issued by the government and are considered to be one of the safest forms of investment. The Reserve Bank of India (RBI) issues three types of Treasury Bills with maturities of 91 days, 182 days, and 364 days. Similar to the United States, Treasury Bills in India are sold at a discount to their face value, and the difference between the purchase price and the face value is the investor's return. These bills are issued through auctions held by the RBI, and investors can participate in these auctions through authorized entities such as banks, primary dealers, and other financial institutions.
The interest rate on Treasury Bills in India is determined by market demand, and the RBI sets the cut-off yield for each auction. These securities are also highly liquid, as they can be easily traded on the secondary market. Overall, Treasury Bills in India are considered to be a safe and attractive investment option for short-term investors.
Benefits of investing in T-Bills
There are several benefits of investing in Treasury Bills (T-Bills), which include:
- Low-risk investment: T-Bills are considered to be one of the safest investment options, as they are issued and backed by the government. They are free from credit risk, as the government has a strong credit rating and is considered to be one of the most reliable borrowers.
- Guaranteed returns: T-Bills offer a fixed rate of return, which is determined at the time of purchase. The rate is generally higher than savings accounts and can provide a higher return than some other short-term investment options.
- Short-term investment: T-Bills have a maturity period of less than a year, typically 91 days, 182 days, or 364 days, making them a good option for investors who want to park their funds for a short period of time.
- High liquidity: T-Bills are highly liquid and can be easily bought and sold on the secondary market, providing investors with quick access to their funds.
- Tax benefits: In some countries, T-Bills are exempt from state and local taxes, making them a tax-efficient investment option.
- Diversification: Investing in T-Bills can be a good way to diversify your investment portfolio and reduce risk.
Overall, T-Bills can be a good investment option for those looking for a low-risk, short-term investment with guaranteed returns and high liquidity. However, investors should also consider other investment options based on their financial goals, risk appetite, and investment horizon.
How to invest in T-Bills in India:
Investing in Treasury Bills (T-Bills) in India is easy and can be done through a few simple steps:
- Open a Demat account: The first step to investing in T-Bills is to open a Demat account with a registered Depository Participant (DP) in India. Open Demat account with Zerodha to start investing.
- Register for the auction: Once you have opened a Demat account, you can register for the T-Bill auction through the Reserve Bank of India's (RBI) website. You will need to provide your bank details and PAN card information to complete the registration process.
- Bid forT-Bills: After registering, you can place your bid for the T-Bill auction through your DP or your bank. The minimum amount that can be invested in T-Bills is usually Rs. 25,000.
- Wait for theresults: After the auction closes, the RBI will announce the results and allocate T-Bills to successful bidders.
- Hold or sell the T-Bills: You can choose to hold the T-Bills until maturity or sell them on the secondary market if you need liquidity.
It is important to note that T-Bills are issued through an auction process, and the interest rate is determined by market demand and supply. The interest rate can fluctuate depending on market conditions, so it is important to keep track of market trends before investing. Also, investing in T-Bills involves market risk and there is no guarantee of returns. Therefore, it is advisable to consult a financial advisor before investing.
How to invest in United States of America T-Bills
Investing in Treasury Bills (T-bills) in the USA is relatively straightforward and can be done through the following steps:
- Open a TreasuryDirect account: The first step is to open a Treasury Direct account with the U.S. Department of the Treasury. This is an online account that allows investors to buy and sell T-bills directly from the Treasury.
- Fund your account: Once you have opened a Treasury Direct account, you will need to fund it using your bank account. This can be done through an electronic funds transfer or by mailing a check to the Treasury.
- Choose the T-bill you want to invest in: Once your account is funded, you can log in to your Treasury Direct account and choose the T-bill you want to invest in. T-bills are issued with maturities of 4, 8, 13, 26, or 52 weeks.
- Place your order: Once you have selected the T-bill you want to invest in, you can place your order by indicating the amount you want to invest and the maturity date of the T-bill.
- Wait for settlement: After you have placed your order, you will need to wait for settlement. Settlement occurs on the auction date, which is usually two days after the auction.
- Hold or sell the T-bill: Once the T-bill is settled, you can choose to hold it until maturity or sell it on the secondary market if you need liquidity.
It is important to note that T-bills are considered to be one of the safest investment options, as they are backed by the U.S. government. However, they do carry some risks, such as inflation risk and interest rate risk. Therefore, it is important to carefully consider your investment goals and consult with a financial advisor before investing in T-bills or any other investment option
3. Corporate FD
A Corporate Fixed Deposit (FD) is a financial product offered by corporations or companies to investors, where the investor can invest a fixed amount of money for a fixed period of time at a predetermined interest rate. The interest rate offered by the company is usually higher than the interest rate offered by banks on regular Fixed Deposits. Overall, corporate FDs can be a good investment option for those seeking higher returns than bank FDs. However, investors should carefully evaluate the credit rating of the company and assess the risk associated with the investment before investing in a corporate FD. To invest in a Corporate Fixed Deposit (FD), follow these steps: It is important to note that Corporate FDs carry higher risks than bank FDs. Therefore, you should carefully evaluate the credit rating of the company and assess the risks before investing in a Corporate FD. You should also read the terms and conditions of the FD carefully and understand the penalties associated with premature withdrawalsHere are some key features of Corporate FD:
How to invest in Corporate FD
4. Corporate Bond
A corporate bond is a debt security issued by a corporation to raise funds from investors. In exchange for investing in the bond, the investor receives regular interest payments and the principal amount is repaid at maturity. Corporate bonds are typically issued by companies with a strong credit rating, but can also be issued by companies with a lower credit rating that are willing to pay a higher interest rate to attract investors. Fixed interest rate: The interest rate on a corporate bond is fixed at the time of issuance and remains the same throughout the life of the bond. Investing in corporate bonds can provide investors with a steady stream of income in the form of regular interest payments, as well as potential capital appreciation if the bond's value increases in the secondary market. However, investing in corporate bonds also carries risks, including the risk of default by the issuing company and the risk of interest rate fluctuations. Investors should carefully evaluate the credit rating of the issuing company and assess the risks before investing in a corporate bond. Investing in corporate bonds can provide investors with a steady stream of income in the form of regular interest payments. Here are the steps to invest in corporate bonds: It is important to note that investing in corporate bonds carries risks, including the risk of default by the issuing company and the risk of interest rate fluctuations. You should carefully evaluate the credit rating of the issuing company and assess the risks before investing in corporate bonds.Here are some key features of corporate bonds:
How to invest in Corporate Bond
5. Gold as Investment option
Gold is a precious metal that has been highly valued throughout history as a store of value and a medium of exchange. It is widely used in jewelry, coins, and bars, and is also used in various industries, such as electronics and aerospace. Investing in gold can provide diversification in a portfolio and may act as a hedge against inflation or economic uncertainty. However, gold also carries risks, including price volatility, potential for theft or loss, and the possibility of a decline in demand. Investors should carefully consider the risks and potential benefits before investing in gold. There are several ways to invest in gold, depending on your preferences and investment goals: When investing in gold, it's important to keep in mind that gold prices can be volatile and influenced by a range of factors, such as geopolitical events, economic data, and currency fluctuations. Investors should carefully evaluate their investment goals, risk tolerance, and investment horizon before investing in gold. Best option of investing in gold as investment option is investing in SGBs. So, we will learn about it more deeply- Sovereign gold bonds (SGBs) are a type of government security denominated in grams of gold. They are issued by the Reserve Bank of India (RBI) on behalf of the Government of India. The bonds are an alternative to physical gold and provide investors with a way to invest in gold without the hassle of storing physical gold. Investing in SGBs can provide investors with the benefits of investing in gold, such as diversification and a hedge against inflation, without the need for physical storage. Additionally, the interest rate offered on the bond provides an additional source of income. However, investors should be aware of the risks associated with investing in bonds, such as interest rate risk and credit risk.Here are some key features of gold:
How to invest in Gold
Sovereign Gold Bonds (SGBs)
Here are some key features of sovereign gold bonds:
6. Silveras Investment option
Silver is a precious metal that has been used for investment and industrial purposes for centuries. Investing in silver can be a good way to diversify your portfolio and hedge against inflation.
How to invest in silver
- Physical silver: This involves purchasing silver coins or bars from a dealer or a bank. Physical silver can be stored at home, in a safety deposit box, or in a specialized storage facility. However, physical silver can be costly to purchase and store, and it may not be very liquid when you want to sell it.
- Silver exchange-traded funds (ETFs): Silver ETFs are investment funds that hold physical silver and trade on stock exchanges. They offer an easy and convenient way to invest in silver without the need for storage. Silver ETFs can be bought and sold like stocks, and their value is tied to the price of silver. However, ETFs come with management fees and may not offer the same level of security as physical silver. You can buy silver ETFs from stock exchange with brokers like zerodha.
- Silver futures and options: Silver futures and options are financial contracts that allow investors to buy or sell silver at a specified price on a future date. These instruments are traded on commodity exchanges and can be used to hedge against price fluctuations in silver. However, futures and options are complex financial instruments that require a high level of expertise.
- Silver mining stocks: Investing in silver mining companies is another way to gain exposure to the silver market. These companies are involved in the exploration, development, and production of silver, and their share prices are influenced by the price of silver. However, silver mining stocks are subject to company-specific risks, such as operational and regulatory risks.
When investing in silver, it's important to keep in mind that silver prices can be volatile and influenced by a range of factors, such as geopolitical events, economic data, and currency fluctuations. Investors should carefully evaluate their investment goals, risk tolerance, and investment horizon before investing in silver
7. Indian INDEX ETFs
An Index Exchange Traded Fund (ETF) is a type of ETF that tracks a specific index, such as the Nifty 50 or the BSE Sensex in India. Investing in Indian Index ETFs can provide investors with a diversified exposure to the Indian equity market with low costs and high liquidity. It is important for investors to do their due diligence, understand the risks involved, and evaluate their investment goals and risk tolerance before investing in any ETF. To invest in Indian Index ETFs, you can follow these steps: It is important to do your due diligence, understand the risks involved, and evaluate your investment goals and risk tolerance before investing in any ETF. It is recommended to consult a financial advisor before making any investment decisions.Here are some popular Indian Index ETFs that investors can consider:
How to invest in Indian Index ETFs
8. Foreign Index ETFs
Foreign Index ETFs are exchange-traded funds that invest in the stock markets of foreign countries. Investing in foreign index ETFs can provide investors with exposure to global markets and diversification across geographies and sectors. It is important for investors to do their due diligence, understand the risks involved, and evaluate their investment goals and risk tolerance before investing in any ETF. It is recommended to consult a financial advisor before making any investment decisions. To invest in foreign index ETFs, follow these steps: It is important to do your due diligence, understand the risks involved, and evaluate your investment goals and risk tolerance before investing in any ETF. It is recommended to consult a financial advisor before making any investment decisions. Additionally, make sure to comply with all necessary regulations and tax requirements associated with investing in foreign securities.Here are some popular foreign index ETFs that investors can consider:
How to invest in foreign index ETFs
9. House 🏡
Personal property or House which yield rental income is also considered as safest investment from long time. It gives monthly support to owner in the form of money every month (rent) and in any adverse situation you can sell your home.
A house is a physical structure that provides shelter and accommodation for individuals or families. Houses can be owned, rented or leased by individuals or businesses. Investing in a house can be a good long-term investment, as it can appreciate in value over time.
Here are some ways to invest in a house:
- Buying a House: One way to invest in a house is to purchase one for personal use or as a rental property. You can obtain a mortgage from a bank or financial institution to finance the purchase. However, this option requires a substantial upfront investment, and you will also be responsible for ongoing maintenance, repairs, and property taxes.
- Real Estate Mutual Funds: Real estate mutual funds invest in a portfolio of real estate stocks and REITs. This allows investors to diversify their real estate investments and access the sector with smaller amounts of capital than required for buying properties directly.
- House Flipping: House flipping involves buying a distressed or undervalued property, renovating it, and then selling it for a profit. This strategy requires a strong understanding of the real estate market and significant capital investment.
It is important to consider the risks and benefits of investing in a house and to carefully evaluate your financial situation and investment goals before making any decisions. It is also recommended to seek professional advice from a financial advisor or real estate expert.
10. Real Estate Investment Trust (REIT)
A Real Estate Investment Trust (REIT) is a type of investment vehicle that allows investors to invest in income-producing real estate properties. REITs own and operate a portfolio of real estate assets, such as apartments, office buildings, warehouses, hotels, and shopping centers, and generate income from rental payments, property sales, or management fees. REITs can provide investors with a diversified and liquid investment option, as they are traded on stock exchanges like other securities.
REITs are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends. This provides investors with a regular source of income, similar to the way mutual funds or exchange-traded funds (ETFs) distribute dividends. Additionally, REITs can offer long-term capital appreciation potential, as the value of the underlying real estate properties may appreciate over time. Investing in REITs can be done through brokerage firms, similar to how stocks are purchased. REITs can be bought and sold like other publicly-traded securities, providing investors with flexibility in managing their investments. It is important to carefully evaluate your investment goals, risk tolerance, and financial situation before investing in REITs, as with any investment. It is also recommended to seek professional advice from a financial advisor or real estate expert. Investing in REITs is similar to investing in stocks, and can be done through brokerage firms, either online or in person. It is important to carefully evaluate your investment goals, risk tolerance, and financial situation before investing in REITs, as with any investment. It is also recommended to seek professional advice from a financial advisor or real estate expert. Real Estate Investment Trusts (REITs) were introduced in India in 2014 to provide investors with an opportunity to invest in income-producing real estate assets. REITs are regulated by the Securities and Exchange Board of India (SEBI) and are required to distribute at least 90% of their income as dividends to investors. In India, REITs own and manage income-generating properties, such as office buildings, retail spaces, and warehouses, and generate income from rent and capital appreciation. The income generated by the REITs is then distributed to the investors in the form of dividends. Here are some of the REITs currently listed on the Indian stock exchange: REITs, or Real Estate Investment Trusts, are investment vehicles that own and operate income-generating real estate properties. In the United States, REITs are a popular way for investors to gain exposure to the real estate market, without having to purchase and manage properties themselves.There are three types of REITs:
How to invest in REITs
Here are the steps to invest in REITs:
REITs in India
REITs currently listed on the Indian stock exchange
REITs in USA
REITs currently listed on the American stock exchange
Some of the largest REITs in the US, by market capitalization, include:
- American Tower Corporation (AMT)
- Prologis, Inc. (PLD)
- Crown Castle International Corp. (CCI)
- Digital Realty Trust, Inc. (DLR)
- Simon Property Group, Inc. (SPG)
- Equity Residential (EQR)
- Ventas, Inc. (VTR)
- Public Storage (PSA)
- Welltower Inc. (WELL)
- AvalonBay Communities, Inc. (AVB)
Hope now you understand 10 safest investment options in the market with very high liquidity. If yes, share this with your friends to help them achieving financial success in life.
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