What is Investment?
The money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future. This is called Investment.
Why should one invest?
One needs to invest to:
§ earn return on your idle resources
§ generate a specified sum of money for a specific goal in life
§ make a provision for an uncertain future..
What are various options available for investment?
One may invest in:
§ Physical assets like real estate, gold/jewellery, commodities etc.
and/or
§ Financial assets such as fixed deposits with banks, small saving
instrume nts with post offices, insurance/provident/pension fund etc.or securities market related instruments like shares, bonds,debentures etc.
What are various Short-term financial options available for investment?
1)Savings Bank Account
2)Money Market or Liquid Funds
3)Fixed Deposits with Banks
What are various Long-term financial options available for investment?
1)Post Office Savings
2)Public Provident Fund
3)Company Fixed Deposits
4)Bonds
5)Mutual Funds
What is an ‘Equity’/Share?
Total equity capital of a company is divided into equal units of small denominations, each called a share. For example, in a company the total equity capital of Rs 2,00,00,000 is divided into 20,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a Share. Thus, the company then is said to have 20,00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights.
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