3 Best Ways to Invest 5000

No amount of money is too small to start with. If we talk about an amount of 5000, some of us will be surprised as to how much it can end up earning over a period of time. The idea is to save and invest wisely. As long as these two combinations are followed with utmost discipline, it is sure to generate more and more wealth. We earn money and save a little while hoping that the savings will turn into a fortune at some point. Is that really possible? Can 5000 earn us a fortune?

Here is the best way to invest 5000 if you want it to grow and actually turn it into a fortune.

Public Provident Fund

PPF is one of the most underrated schemes with guaranteed returns. It is government-backed hence any money invested will be returned along with interest component. With a minimum investment requirement of 500 per annum, this investment source is preferred by a lot of people. Each year, the rate of return on this is redefined by the government and hence the interest rates could keep fluctuating. However, the best part of this investment is that it results in a tax rebate. If an investor is looking at a long-term horizon, then this makes for an ideal investment source for 5000.

Mutual Funds

Considered to be one of the safest investment options, a small investment of 5000 can turn into a large sum when invested in mutual funds. The idea is to select a mutual fund that suits an individual’s risk appetite. There are a number of options available in mutual funds, from equity to debt. Depending on an individual’s understanding of the various categories, the right kind of mutual fund can be selected. These investments also carry a lot of transparency around performance and hence allow for a calculated decision.

National Savings Certificate

NSC is yet another safe investment that can be a source to grow 5000 in to a larger number. Available for purchase in post offices, and also available in various denominations, these are opted by a lot of investors who have a smaller risk intake. With a significant rate of interest, these can actually earn more as compared to fixed deposits. With a minimum investment period of 5 years, a small amount of 5000 can be turned to a larger amount in a relatively smaller time horizon.

Recurring Deposit

As compared to fixed deposits, recurring deposits allow one to invest a smaller amount of money over a period of time and still be able to earn significant returns after a set time period. These are popular among conservative investors and are flexible as far as the maturity of an investment is concerned. Depending on the bank that one chooses, the rate of interest could vary and one can choose a competitive interest rate that is being offered.

Apart from the options mentioned above, if an investor has a significant risk intake, then investing in stock markets could also earn substantial returns in a short time period. It all depends on calculated decisions and smart choice of investment irrespective of the amount being invested.

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