Your savings need to be invested to grow your money. So, the main target is the rate of return. But sometimes, high return from investment may fall into the risk of losing money.
So, what important things should you consider before investing your savings?
Following key five factors will help you to fix your investments plan to achieve your goal.
Return from investment
Our first target from investment is the return. How much profit we will get from our investment is the main factor to make decisions before investment.
In Bangladesh, now the high rate of return you can avail by investing into savings certificates and bonds. Nearly 10 per cent profit is available from these government issued certificates or bonds.
Timeframe
Timeframe is an important consideration because the rate of return depends on the duration of the investments. If you invest for the long run then your rate of return will be higher. If you think that you do not need your savings for the next five years then it is perfect to go for long term investments and you will get a high return.
But If you require the money within one or two years then you have to go for short term investments and your return will be less than long term investments.
Safe investment
Sometimes we tend to achieve high profit from investments to reach our target quickly. But such a decision may not be the safe investments option. At maturity the return and the actual investments may not receive means lose of full amount.
So, during considering the investment option you have to enquire about the organization’s reputation with the existing customers and the years of dealings with customers money.
Risk control
Determine your investment tolerance. If you are able to take high risk then the amount of return will also be higher. But if you are the new investor and the amount of savings is small then it is better to avoid the high risk.
In that case, now in Bangladesh government issued savings certificates and bonds are low risk compared to investing into shares of listed companies from the capital market.
However, if you prefer to invest into shares you have to invest for a long time considering the current condition of the market.
Tax benefits
Your return will be affected due to tax. Tax shall be deducted at the time of profit disbursement on your investment means lower your return. So, consider where the tax rate is low so that you can avail the maximum return. If you are a taxpayer then also consider whether the investment will be considered for the tax rebate then it will give you the maximum tax benefit as well as return.
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