Investing in Direct Equity and equity mutual funds may enable you to maximize your compounding benefits. However, these investments are also vulnerable to market volatilities. If you are not much inclined towards making high-risk investments, you may look towards other investment opportunities that offer a more secure, fixed power of compounding returns.
First, you have debt funds, which allow you to avail steady returns via fixed interest generating securities such as corporate bonds, treasury bills, government securities, and commercial paper.
Second, you can look into the National Pension System (NPS), An efficient instrument that leverages the power of compounding, NPS is essentially a long-term retirement-focused investment opportunity, which helps you reap compounding benefits through a mix of equity, fixed deposits, liquid funds, corporate bonds, and government fund investments.
Other long-term investment plans that allow you to accumulate wealth through the power of compounding include Bank fixed deposits (FD) and the Senior Citizens' Saving Scheme (SCSS).
Give Your Savings the Power of Compounding!
The benefits of the power of compounding are immense – you can quickly maximize your savings and investments to support your long-term life goals financially. All you have to do is make an early start and be patient with your investments so that you do not hinder their growth potential. Instead, you must remain invested for an extended period to fully leverage the power of compounding. You can reap compounding benefits from a variety of investment options in India including fixed-income and market-linked instruments.
At the same time, you can avail of significant tax benefits with investment under 80C. This way, you can easily augment your savings with a reduced tax liability - making sure that that you stay on track towards a life's worth of disciplined long-term returns, courtesy the power of compounding.
To avail tax benefits and secure your family from any uncertainties, you can opt for Unit linked insurance plans. Unit Linked Insurance Plan (ULIP) can help you in providing a protection cover for family and provide opportunity to invest money market basis your risk appetite.
Overall, you can maximise the effect of power of compounding on your investments while keeping risk at bay and time horizon in mind.