Starting an investment journey may sound difficult, but the truth is, it is not. There are plenty of small investment options available. Beginners can make use of them to begin their investing journey.
Let us look into some options to reach the answer to the question, “How to Start Investing with Rs1000”
Is Rs. 1000 enough?
The amount of money that you are investing is not important, but the habit of investing. You can invest whatever you save. Rs. 1000 is a decent amount to begin investing with. There are several small investment ideas with the given amount that will not only give you a good return but also expose you to the investing world in the best possible way.
It is always advised to start small to avoid major losses in the learning stage. There are many aspects of investing that an individual understands only when they practically do it. After learning and then moving to bigger options, prevents unnecessary losses.
How to Start Investing with Rs1000
1. SIP
A Systematic Investment Plan (SIP) is the simplest method of starting investment with Rs. 1000. You can go for equity, debt, or hybrid mutual funds based on your risk tolerance. SIPs as low as Rs. 100 per month are facilitated through apps such as Zerodha, Groww, or Paytm Money.
Through SIPs, the funds are professionally managed, and you also enjoy rupee cost averaging. No active management is required for the funds; just choose the right fund and invest.
2. Digital gold
Digital gold is a secure and convenient way to invest in small amounts of gold. You can purchase a part of a gram of gold with Rs. 1000. It is a safe option for conservative investors and offers liquidity, transparency, and secure storage without extra fees.
Digital gold provides an effective hedge against inflation and also contributes to portfolio diversification. Also, getting gold by investing a small amount gives a sense of self-satisfaction and accomplishment.
3. Recurring Deposit (RD)
For a conservative investor or a beginner, recurring deposits by banks and post offices are a suitable choice. Investors get fixed interest with as little as Rs. 500 a month and develop the savings habit.
While the returns are less than equities, these provide guaranteed returns and are best suited for short-term objectives. A small investment of Rs. 1000 with a fixed rate of interest is a good choice for beginners.
4. Government schemes
If you are seeking long-term and secure investment plans, opt for such schemes as Public Provident Fund (PPF) or National Savings Certificates (NSC). There are certain lock-in periods for these options.
A minimum of Rs. 500 a year is mandatory for PPF, making it suitable for starting investing with Rs. 1000. It also provides tax benefits under Section 80C. The interest is compounded, which makes it an excellent plan for security in the future.
5. Penny stocks
Penny stocks are listed shares (generally below Rs. 10) of tiny or little-known firms. Individuals can purchase a large number of such shares with Rs. 1000 and also diversify their portfolios. They might promise high returns if the company grows in the future.
But they are highly volatile and risky, with improper financial reporting and a lack of liquidity. If individuals want, they can invest a small amount of money after conducting deep research first. Taking recommendations from trusted sources is advised.
6. Explore Fractional Investing in Stocks
Platforms such as Smallcase, INDmoney, and Groww provide fractional investing. It is no longer necessary to pay the full amount to invest in the stock. Individuals can purchase fractions of shares of large companies like TCS, Reliance, or Infosys with just Rs. 1000.
Stock market investments are risky, though, so it’s important to research thoroughly. It is a good way of understanding the stock performance based on profit and loss made.
7. Exchange-Traded Funds (ETFs)
ETFs are tradeable securities that follow an index, a commodity, or a basket of assets. Individuals can invest in ETFs such as Nifty 50 ETF or Gold ETF with Rs. 1000 via channels like Zerodha or Groww.
They provide cost-effective diversification, are comparatively safer than single stocks, and are simple to purchase/sell on stock exchanges. They mirror the index they represent, making it a good option to invest in with a small amount.
Bottomline
The conclusion can be drawn that there are various alternatives available to start investing with Rs. 1000. Individuals can analyse their risk tolerance and choose accordingly. However, it is advised to research thoroughly before opting for any option.
Written by: Tanya Kumari
