Handling Savings




Many of us find it difficult to save but investing saved money to yield a certain result is even more difficult. You need to understand the available options before making decision for hard earned savings. Based on small research, following options are available for disposal of savings.

Purchasing power of your money erodes at the rate of inflation. In Pakistan, inflation is at 22%. If you wish grow your money, you need to invest at something that yields more than inflation rate

• Government Saving Schemes are saving schemes sponsored by government in order finance budget deficit. Average rate of return on government securities is 12-13%p.a with relatively long term commitment( Three to five Years).
   

• Term Deposit at Banks is considered to safer & flexible but offer little lower yields with shorter terms
   

• Long Term Saving Plans- Banc assurance is not as popular as other avenues in this paper but it is simply one of the easily affordable schemes. You contribute smaller portions every year and receives handsome lump sum amount at the end of a long term. Minimum investment period is ten years. Its best suited for investors who have very young children.
   

• Equity Market is most riskier with higher returns. You need to pick up low priced stocks. Dividends & capital gives net yield on your investment. Mutual funds are considered to safer for equity market investment
   

• Foreign exchange market provides avenues for investing in foreign currencies to keep parity with inflation rates. In the year 2007-2008, Pakistani rupee lost 20% in its value against US dollar.