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How homemakers can make the most of their idle cash

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Mother’s Day is celebrated in India on the second Sunday of May, and it is said that homemakers are the best money managers. A lot of them end up saving some money at the end of every month. However, experts say it is better to invest that money to earn capital gains, rather than keep it idle.

Therefore, financial literacy and prudence of every homemaker is the need of the hour.

Homemakers must be stringent when it comes to spending money. They need to draw a budget, stick to it, and save a fixed sum on a monthly basis, which could be invested. If the investment horizon is short, they may consider initiating a monthly systematic investment plan into a mutual fund such as liquid funds. Arbitrage funds are also a great choice.

“Risk-averse homemakers can invest in recurring deposits (RDs) and post office monthly income scheme (POMIS). However, the returns offered by these investments may be curtailed compared with arbitrage and liquid funds. Homemakers with a long-term investment horizon may also consider investing in the public provident fund (PPF),” said Archit Gupta, founder and chief executive officer, ClearTax.

This is one of the best-suited investment options for homemakers since they can invest in mutual funds with minimal savings—as low as Rs500. By investing in such asset classes, they can reap the benefits of the stock market with a moderate amount of risk involved.

Direct equity can be another option for homemakers. “They may not know how to read the financial statements, but they can better use the product and its quality analysis skills in analyzing stocks and investing in direct equity. Although investing in stocks consists of high risk but can offer more significant rewards in the long run,” said Pranjal Kamra, founder, Finology.

Other investment options include exchange-traded funds. This is best suited for the homemakers who are just getting started with the stock markets.

Remember that while investing you should always spread the money in different schemes. “Putting your money in schemes such as SIP, recurring deposit, mutual funds, etc can be a good way of making yourself financially independent. Although, it is equally important to keep your eyes open for changing interest rates, tenures and other details of the schemes you invested in so that you keep channelizing your money to get the best returns,” said Rohit Garg, co-founder and CEO, Smartcoin.

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