Becoming financially sound and being able to secure your future as a woman is extremely important. And with financial independence comes the responsibility to provide for the people who depend on you. If you are a single mother or the only earning member of your family, it gets a lot tougher. Saving money in a bank account or a single fixed deposit is not enough. In order to be truly financially independent, especially with other people depending on you, your money needs to work for you. We rounded up some safe and feasible investments for women who have dependents and/or are not in a pensionable job. So, whether your goal is a regular pension after retirement, looking after elderly parents, or securing your child’s future, these investment avenues will help you.
1. Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana is a scheme introduced by the government under the ‘Beti Bachao Beti Padhao’ campaign. It aims to create savings for the daughter of the family and can be opened by their parents or legal guardians. If you are a woman with a daughter, investing in this scheme can be really beneficial. It offers an interest rate of 7.60 per cent per annum with tax benefits of up to ₹1.5 lakh. The minimum amount to deposit is ₹500 and the maximum limit is ₹1.5 lakh every year. While one needs to deposit the amount regularly for 15 years, the maturity period of the scheme is 21 years. If you start investing in this scheme from the time your daughter is born, by the time she’s 21, it can serve as a fund for her higher education.
Good for: Women with daughters
2. National Savings Certificate
National Savings Certificate is a low-risk, fixed-income investment scheme for individuals. This is a safe investment with a lock-in period of five years and an interest rate of 6.8 per cent per annum. You can start with a minimum amount of ₹1,000 and there is no maximum limit. This savings scheme is perfect for women looking for a safe investment avenue with a steady income. It also gets you a tax benefit of up to ₹1.5 lakh and one can nominate a family member in case of any unfortunate events.
Good for: Women with senior dependents and no pension
3. Post Office Monthly Income Scheme
Post office monthly income scheme is one of the best investments for women who are single mothers or the only earning members of their families. In this scheme, you can invest a certain amount and earn a monthly income through fixed interest. The tenure of the POMIS is five years with an annual interest rate of 6.6 per cent which is payable on a monthly basis. This scheme is safe from market risks and you can start with a minimum amount of ₹1,000 and increase it as you like. You can invest ₹4.5 lakh individually or ₹9 lakh jointly into the scheme and withdraw it after the maturity period.
Good for: Women with senior dependents and no pension
4. Systematic Withdrawal Plan in Mutual Funds
A systematic withdrawal plan or SWP is a way to generate a monthly income for yourself. One can invest and withdraw a certain amount on a regular basis. It can be weekly, monthly, quarterly, or yearly, depending on you. So, if you have mutual fund investments or are going to start soon, this is a great way to ensure your money works for you. Keep investing through SIP (systematic investment plan) into a mutual fund while you have a regular income. Once you feel the need to generate another source of income, you can start withdrawing from this mutual fund at regular intervals. The good part here is that the sum you leave in the fund keeps earning interest. So, if your mutual fund is performing well, your investment will keep growing even as you’re withdrawing from it. One can continue with this scheme as long as they have balance units in the mutual fund investment.
Good for: Women in a non-pensionable job, homemakers with limited monthly budgets
5. Health Insurance
One of the best investments for women with elderly parents is investing in a good health insurance policy that covers the whole family. Women with dependent parents should buy a policy that covers senior citizens above the age of 60 and provides for their medical expenses and treatments. One can get attractive discounts, bonuses, and offers, depending on the amount they insure and the company they pick. One can also get tax benefits on parental insurance premium payments. Buy a plan that ensures a minimum cover of ₹10-20 lakh, keeping your parents’ age and health in mind. Also, you can get incentives on renewals and bonuses added to your existing cover if you don’t claim your health insurance for a year.
Good for: Women whose employers don’t provide health insurance
6. Life Insurance
Just like health insurance, life insurance is also a great investment option for your children, parents, or spouse. This creates a financial cushion to cover expenses like debts, daily expenses, and more in case of your demise. Investing in a good life insurance policy brings financial stability and peace of mind. All you have to do is pay small premiums over a certain period of time. This reduces the burden of paying hefty amounts in one go and helps one put away money over a period of time by one’s choice. You should get a policy of at least 10-12 times your annual salary.
Good for: All women with dependents
7. Fixed Deposit Sweep-in
Fixed deposit sweep-in is a facility provided by several banks that provides the interest of a fixed deposit without the lock-in period. For example, if you have managed to save about ₹5 lakh in your savings account, you can put it away in a sweep-in fixed deposit for one year. This way, you will still have access to this money for emergencies but it will earn the interest rate of a regular fixed deposit. When you need to use it, you can withdraw from this FD without any penalties or extra paperwork. The money that you have not withdrawn from the sweep-in FD will continue to earn the same rate of interest. Many banks also offer the auto-renewal feature which means that your sweep-in FD will renew at prevailing interest rates automatically and your capital will keep increasing every year.
Good for: Easy-to-access emergency funds
8. Public Provident Fund
The Public Provident Fund scheme is a very popular long-term savings scheme in India. This is because it offers a combination of tax savings, returns, and safety. The objective of the PPF scheme is to help individuals make small savings and earn returns on the savings. It has a tenure of 15 years with an interest rate of 7.1 per cent per annum (as of March 2022) and no tax is to be paid on the interest earned. The minimum amount to be invested is ₹500 and the maximum is ₹1.5 lakh for every financial year. You can also keep extending the scheme every five years at your convenience. And since the scheme is backed by the government, it is risk-free and offers guaranteed returns.
Good for: Women with children
9. National Pension Scheme
National Pension System is a retirement benefits scheme by the central government to generate a regular income post-retirement for all subscribers. One can make regular contributions to their NPS account till they retire. And once you are 60 years of age, you can withdraw a maximum of 60 per cent of the corpus. It is mandatory to buy an annuity with the remaining 40 per cent which ensures that your money stays invested. You can also have a Tier 1 and Tier 2 account to let you choose the investment plan that suits you. In a Tier 1 account, your money is locked in till retirement and you can only withdraw it in case of emergency. For a Tier 2 account, you must have a Tier 1 account and you can withdraw the money whenever you want but it is taxable and provides no tax benefits as opposed to a Tier 1 account that offers limited tax benefits.
Good for: Women with a higher risk appetite and ability to block funds till the age of 60
Investing in stocks can get you good returns over a period of time in India. You can opt for low risk, medium risk, and high-risk investments depending on how much risk you want to take to get good returns. But since the stock market is volatile, creating a diverse portfolio can save you from any excess loss and create a balance. If you are going to dip into equities, make sure you have debt instruments, like fixed deposits and savings schemes like PPF, to weather any losses. So, look for low-risk investments and invest smaller amounts if you’re just starting out. Investing in the stock market is a great way to utilise one’s disposable income and get good returns over time. However, it is crucial that you do your own research instead of going by a friend or relative’s advice on which stocks to buy.
Good for: Women who need to build a sizable corpus over 10-15 years and have a high-risk appetite
Featured Image Source