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What are you doing with your Raksha Bandhan money?

Just got cash for Raksha Bandhan? Put in a savings account, recurring account or a fixed deposit.

Raksha Bandhan is here and once again your brother has gifted you cash. What are you going to be doing with your newly gifted money? It is important to use the money wisely rather than spending it as soon as you get it. There are many ways in which you can utilise this money rather than spending it. You should try investing in order to get higher returns in the future and achieve larger financial goals. This creates a great habit of saving and also allows you to have greater returns for your future self.

Put it in a savings account

This is one of the easiest ways to park your Raksha Bandhan money! Just open a savings account in a bank of your preference. While your parents may have made you a savings account, you can easily make a new savings account within five minutes. If you are a student and receive money from your relatives, a new savings account can be a good way to park your money gifts.

You can make a digital zero balance account instantly through your PAN and Aadhaar card. In zero balance accounts, there is no need to keep a minimum amount in your account. It has all the benefits of a regular savings account and more.

Read: A zero balance account vs a regular savings account

Open an FD

This is one of the safest ways of investing your money. If you receive a moderate amount of money from all your brothers, say around Rs.5,000 or more,  you can put the money in a fixed deposit. The interest rate of an FD is much higher than that of a regular savings account. Furthermore, FDs are not affected by market movements. This means that the FD interest rate will remain same throughout the tenure.

There is a misconception that FDs are supposed to be for a longer tenure. That is not true. An FD can be for as long as 10 years to as little as 7 days! The amount you invest in an FD is also not restricted. If you don’t need money now but you believe that you may need money in 6 months or a year, you can open an FD of the same tenure.

Read: Pick the type of fixed deposits of your choice

Invest in a mutual fund

Do you know how mutual funds work and want to experience investing in stock markets? If so use your Raksha Bandhan money and invest it in equity mutual funds. Perhaps try and invest a portion of your money in mutual funds and try to understand how mutual funds work. Mutual funds are very beneficial as they allow you to earn higher returns. Mutual funds are different to investing in the stock market directly. This is because if you are purchasing stocks directly you would have to do a lot of research. However, investing in mutual funds require little to no research about the particular stocks.

Read: Should you invest directly in Stocks or Equity Mutual Funds?

To conclude, this year try and make effective use of your Raksha Bandhan money! Think about investing your money in the various financial instruments to gain good returns. This can be a great way to experiment and gain knowledge about the various financial instruments.  

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