Secure Your Future: Top 3 Low-risk Investments for Single Mothers- InveStree ep.5

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Women, in India, are not in the habit of investing. Those who are married typically leave all the investing and financial planning to their spouses. Of course, there is a small percentage of women who are becoming financially savvy and this trend is growing with more and more women joining the corporate workforce with the aim of becoming financially independent. There are also those women who are single mothers. Typically, these women do not make it a practice to invest, either out of fear or a lack of confidence. Many women do not know how to invest their capital and the channels of investment they should use. They often fear the risks involved and the potential losses they may face as single mothers with no spouse to depend on. Nonetheless, there are avenues for investment that are relatively Low-risk Investments, and single mothers can explore these and go ahead and invest. 

Investment – Not as Difficult As It May Seem

If you are a single mother and lack the confidence to make investments, you should not worry anymore. You may be busy juggling work and the home with your main priority being raising your children as a single parent. However, all it takes is a bit of knowledge and information to get your investments going. 

Being a single mother is a challenge and single mothers must be commended for meeting that challenge alone, but in case you want to secure your child’s future, and meet your own expenses through factors like inflation, you must be willing to invest in certain channels that will give you a flow of income and build your wealth. Your greatest challenge as a single mother may be the management of your finances, but like you meet all the other challenges in your life, you can deal with this one too. 

Top 3 Low-Risk Investments for Single Mothers

By employing the appropriate strategies and tools, you can easily grow your wealth and create a robust financial foundation. Here, three low-risk investment instruments are discussed and you can be assured of your money’s growth without any worry: 

  1. PPF or Public Provident Fund

In India, PPF is a famous investment instrument and is backed by the Indian government. This makes it a risk-free scheme. Here are some features:

  • Once you open a PPF account, you are able to invest anywhere from Rs. 500 to Rs. 1.5 lakh each year for a period of 15 years. 
  • You may renew your PPF after the 15-year period or opt to withdraw your capital. 
  • On average, your returns through a PPF investment are approximately 7.1%. It may not tide you over through inflation, but it provides you with monetary backing. 
  • It is a safe investment and you can get the benefits of a tax deduction on it as well. 
  • After a 5-year period of investment, you are permitted to withdraw 50% of your PPF amount. 
  • The interest you collect on your PPF account is compound interest, so your wealth grows.
  • For instance, if you deposit Rs. 5,000 into your PPF account each month for a period of 15 years, you will collect an amount of Rs. 9,00,000. As a result of compound interest, this amount can potentially grow to up to Rs. 16,27,000. 
  • You can open a PPF account at any bank or its website, or at any post office. To open an account, you need to provide your KYC documents like your PAN card and Aadhaar card. 
  1. EPF or Employees’ Provident Fund

This is a government-backed scheme which makes it secure. It was launched with the purpose of providing salaried individuals with a corpus for their retirement. Here are some features of EPF that you should consider:

  • The Employees’ Provident Fund scheme applies only to government and private sector employees. For employees who work in the private sector, companies must be registered under the EPF Act for the scheme to be applicable to those employees.
  • In an EPF scheme, you may invest 12% or more of your salary each month, and your employer will invest a certain portion of your salary as well. 
  • Typically, interest rates for EPF accounts amount to 8.5% and your money will gradually grow. 
  1. KVP or Kisan Vikas Patra

This is an often-ignored investment option, also risk-averse as it is backed by the Indian government. Here are some of the scheme’s features:

  • You can invest in KVP via any post office and you get a physical certificate as proof of investment.
  • The scheme has a fixed duration of 10 years, 4 months, before which you are not permitted to make any withdrawals. 
  • The KVP scheme generates a potential average interest rate of 6% to 7% which is more than any bank fixed deposit may offer you today. 
  • You can also claim tax deductions with this scheme. 

Explore Multiple Options

Being a single mother does not mean you cannot invest in schemes that are mainly risk-free and ensure you get a decent return from your investment. If you invest in one or more of the risk-free schemes mentioned in the article, you may be well-equipped to deal with your financial requirements, be it your retirement expenses, medical emergencies, or your child’s higher education. 

 

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