Consider these 9 things before investing in mutual funds!
What is the right way to invest in mutual funds? How do mutual funds work? What kind of risk is involved? Which fund is right for whom? What things should be kept in mind before investing? Watch this video to know-
Pandemic-scarred FY21 has pushed up the country’s household savings. The net financial savings in FY21 is set to rise to Rs 22.4 lakh crore from Rs 16.1 lakh crore in FY20 – a Bob Beamon-type jump. As a percentage of Gross National Disposable Income, it is set to rise from 7.8 in FY20 to 11.2 in FY21, the highest in the last four years. Experts are unanimous in their opinion that the scourge of the virus, associated restrictions, lockdowns, job losses, and slashed wages have dampened consumer confidence, deeply impacted discretionary expenditure, and resulted in a surge in savings. According to figures from RBI and SBI, deposits rose from Rs 8.7 lakh in FY20 to 10.6 lakh crore (provisional) in FY21 – a rise of about 21.8%.
Deposit figures moved in crests and troughs over the past few years. In FY16 it stood at Rs 6.4 lakh crore, in FY17 it jumped to Rs 9.8 lakh crore, only to drop to Rs 5.3 lakh crore in FY18 and again to rise to Rs 8.1 lakh crore in FY19.
Rising domestics savings has huge benefits for the economy if these funds can be channelised in industry and infrastructure. However, with deposit rates in banks and post offices steadily declining, there is a growing reluctance among many to trust banks and post offices with their money in the long term.
The onus is on the government to come up with innovative options to incentivize investment in long-term instruments. Lucrative saving schemes can help investors beat inflation and the government create a corpus for infrastructure development. Once these funds are employed in setting up of new industry/infrastructure it will also generate employment that will boost both consumption and savings. Incentivising long term investment in the country is, therefore, crucial for our collective future.