How to start with a small investment in India?

Aug 17, 2022

How to start with a small investment in India?

You can start Investing with little money.

There’s a popular myth that you need to have tons of money and a lot of knowledge to start investing. this can’t be further from the truth. Whereas, you do need to have the basic understanding of the market and some capital to start your investing journey, starting small and building on it can actually be beneficial and the right plan for beginners.

5 ways you can start investing with minimal capital

Equity

In today’s day and age, there are many online broker platforms which offer commission free trading in ETFs. Equity is a great way to start your investing journey. Buying individual equity stocks of the companies which are listed or unlisted on the stock exchanges is known as Equity investment. You can get dividend and capital gains returns from your direct stock investments. The performance or return of stocks depends on factors such as market condition, company’s performance, etc. 

It’s a high risk to reward type of investment. So, even if you’re starting with a relatively smaller capital you need research and have an understanding of the stock market to get any kind of returns.

P2P (Peer to peer) lending platforms

lending platforms are a relatively new concept in India which is gaining phenomenal popularity in recent years. Peer to peer platform brings borrowers directly to lenders, cutting out the financial institutions as middle men. This allows p2p platforms to give higher interest rates to lenders on their returns compared to those from many traditional fixed-income asset classes, with relatively lower risk than the share market. 

How can you start:

For an investor, the person has to open an account on a P2P platform and invest their money which further disperses to the other side, borrowers. For loan applicants, they have to post their financial profile which will be assessed based on which their approval for loan and the interest rate will be determined. The investors’ money will be diversified and dispersed for multiple loan applications to mitigate the risk.

LenDenClub can be your 1st choice for starting your Investment journey on P2P Platform. LenDenClub, Most importantly, has a robust Borrower Screening which makes defaults less likely big names like LenDenClub follow such practices.

Bank RDs

A facility offered by the banks where recurring deposits by you get ensured safety and also provides Interest on it at maturity.

In Bank Recurring Deposits, you are required to invest a sum amount every month or 3 months depending on what plan you choose with the bank for a specific term and at an existing rate. At the end of your tenure you will receive your principal amount with the compound interest added over the term.

Bank RD offers you returns. Thus, your investment is safe. You cannot withdraw from your RD till it matures. By breaking your RD before the term, you can lose out on compound interest and incur penalty charges. RD can be both long-term and short-term. The term can be as low as 3months and can go as long as 10 years.The interest rate agreed upon at the start will continue throughout the term in a Bank RD.

Low initial investment mutual funds

Mutual funds is an option that comes with a systematic investment plan. You can invest in them as frequently as monthly with as little as 100 rs. Because mutual funds are approachable and bring the rupee cost average, investing in mutual funds through SIP makes it more favorable.

During volatile markets, like the recent one, mutual funds become a blessing in disguise.

Investment in mutual funds can be as low as 100 rs because most people can invest in it. Its relatively lower risk than stocks.

Real estate crowdfunding

The category of investment known as “real estate crowdfunding” is making it possible to own a fractional share of large commercial properties without the trouble of being a landlord.

It is an intriguing way to learn about commercial real estate investing and also diversify your assets. It is not recommended to put all of your money on these platforms(or on any one platform), but they do make an intriguing alternative isset that’s not directly correlated with the stock market.nvestment. 

Good thing of owning a piece of a real physical a You share the cost and risk with other investors and you have no responsibility for maintaining the property or even doing the paperwork to buy it.

To sum it up

Nowadays, there are many investment options available in India. Unlike a few years ago, when FDs and equities were the popular choices among people, various new-age investment options like P2P lending have emerged. The best part about these investments is that they have the ability to balance the risk and returns, which most investors find hard to achieve. 

On top of that, online marketplaces like LenDenClub further simplify the process for investors. Let us see how –

  • A family of more than 2 million people
  • AI-powered Auto investment
  • Allows diversification and reduces risk
  • Screens borrower’s profile through 200+ data points to reduce the risk of default.
  • Provides return of up to 10 to 12% p.a.*
  • Market-risk free returns
  • Safe and Secure transactions using the ESCROW mechanism. 

Hop on the bandwagon with 2 million+ investors. Register now!

*P2P investment is subject to risks. And investment decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

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