This post is based on Iona Minton’s investment related queries. She emphasises on the fact that there are several investment options but there is risk in every options and the rate of risk differs with every investment, period of investment and the lending rates of the product offered to you by a bank. The lending rates for a fixed deposit is fixed and for different savings plan you get different interest slabs. If you add the risk factor, the lower the risk the less is your returns.
But the major factor when you invest your money is the growth factor of your investment without which there is no point in investing money. The growth factor again depends where you have invested your money, the economic factors and the fluctuations in the exchange rate.
Taking these factors into consideration Iona rightly concludes that:
If you only want to invest for the short term (two years), then investing in a medium to long term vehicle like a unit trust is not a good idea, because it may be in a downswing at the time you need the money. They usually show growth over three to five years. If you intend to access the money in two years or less, a bank product is your best bet (interest bearing).
