June 21, 2024

Are You A First-Time Investor? Check Out The Top-5 Tips Before Investing

Fixed Deposit

By deciding to save, you have taken the first step towards financial freedom. Your savings can come to your rescue when the times are hostile.

However, with so many options available around you, finding the right financial instrument can be challenging. Even when you find one, such as a fixed deposit with the best interest rates, not having proper objective can stop you from realising your investments’ full potential.

Here are the top-5 things you may do to ensure your capital compounds at a fast pace, and you can fulfil your dreams, early in life.

  1. Set Your Financial Goals

There are two ways of fulfiling one’s dreams. You can either save in a high-interest financial instrument, such as an FD scheme, until you have enough money to fulfil the goal you are dreaming about, or you may opt for a loan. The first option is always better, as you do not have to pay regular EMIs.

You may wish to fulfil various goals, including buying a house or a car, educating your child, gifting someone something, travelling around the world, etc. Before investing, it is prudent to figure out the amount you will need for each goal and when you will need it.

Once you fix the goals, it will become easy to determine the amount you need to save every month.

  1. Plan Your Budget

A sensible investor always creates a budget and sticks to it. When you have a meticulously planned budget, you can save well and spend hard.

Ideally, you should spend 40% of your net monthly income for everyday necessities and keep 30% for emergency needs. The rest 30% you can invest in a high-yield FD scheme, such as from PNB Housing Finance.

As you inculcate the habit of saving, fulfiling your goals will become much easier.

  1. Analyse the Risks

Not all financial instruments carry the same type of risks. While some promises to offer high returns against high risk, some like a fixed deposit with the best interest rates offer high returns with low risks.

Determine which type of investor you are and what your investment goals are.

If you do not mind taking risks, then the equity market can probably give you much higher returns than an FD scheme. However, if you are a conservative investor who wants to stay satisfied with a 9.13% yield to maturity, then an FD scheme will be the best choice.

  1. Diversify Your Portfolio

Other than safe investment options like FD schemes, PPF, MIS, or SCSS, perhaps no other financial instrument offers steady returns all the time. On some days, equities may shine more than bonds or commodities; while on other days, the latter may outshine the equity market.

To generate healthy returns from your investment, you should diversify your money across various asset classes. Diversification also minimises the risk by ensuring optimal returns.

  1. Be Debt-Free

Debt is a sign of poor financial health. Debt, to a certain level, is okay. But, the problem arises when it exceeds the borrower’s repayment capability.

The biggest disadvantage of debt is that it eats into the returns from your investments. For example, if you put your funds in an FD scheme that fetches 6.95% per annum and the loan’s interest rate is 9%, you pay more than what you earn.

Hence, before investing money, it is wise to clear off existing debts and start on a fresh note.


Life can be easy when you put your hard-earned money into an FD scheme which offers the best fixed deposit interest rates. However, before investing for the first time, you must create a financial plan and stick to it.