If you are born in the 80s and 90s, you are the Millennials also called Gen Y. Gen Y has seen major advances in technology and lives in a very fast World. The previous Generation called Gen X enjoyed financial stability. Gen X enjoyed job security. Unfortunately, Gen Y does not enjoy job security or maybe even financial stability.
Gen Y is known for independence, optimism, confidence and social media craziness. The biggest problem Gen Y faces is the reluctance to save. Gen Y believes in instant gratification. This is seen in their need for credit cards. Gen Y knows that credit cards charge high interest. Yet, they spend heavily using credit cards. Studies have shown that Gen Y avails loans and credit cards liberally and most of their money goes repaying EMIs.
But, things are changing. Gen Y has seen a few recessions and job loss is rampant. This has forced Gen Y to save and invest smartly as he knows that the future is uncertain. Yes, Millennials today are into saving. Risk-averse millennials invest in FDs, RDs and PPF. Millennials also avail life insurance plans.
The Tech-Savvy and risk-taking millennials invest in equity mutual funds and shares. Want to know more on mutual funds? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.
Gen Y is the future and Prime Minister Narendra Modi is a firm believer in Gen Y. PM Modi in his speech at the World Economic Forum 2018 in Davos, Switzerland, said that India will soon be a 5-Trillion-Dollar economy. PM Modi says India's youth will be job creators and not job seekers.
Millennials invest in Fixed Deposits and Recurring Deposits to save their money. Millennials believe that the money in FDs can be used for a rainy day. RDs are used by risk-averse millennials to meet financial goals.
Fixed Deposits offer an interest of 6.25-6.5% a year. Recurring Deposits offer an interest of 6.5-7% a year. You can invest a fixed amount every month in a recurring deposit and earn interest similar to a fixed deposit. The minimum tenure is 6 months and the maximum tenure goes up to 10 years.
Risk-averse millennials save and invest in FDs and RDs to meet financial goals and save for emergencies.
Millennials are known to borrow and spend heavily. Most of their money is spent paying EMIs. Fortunately, Millenials are forced to make tax-saving investments to save on tax.Millennials invest in PPF and life insurance plans to save tax. Investments in PPF, 5 year tax saver FD, NSC, Post Office Time Deposits, ELSS, premiums paid on life insurance plans, home loan EMI (Principal) and some other investments, enjoy Section 80C deductions up to Rs 1.5 Lakhs a year.
You get tax deductions on EMI (Interest) on home loans up to Rs 2 Lakhs a year under Section 24.Millennials are able to save tax if they avail life insurance plans, home loans or invest in certain tax saving instruments.
Millennials are natural risk takers and many of them invest in equity. An investment in equity mutual funds and shares gives high returns to those who have ability to take risk. If you stay invested in shares and equity mutual funds for a year or more and then sell, your profits are called LTCG (Long Term Capital Gains). LTCG is tax-free.
Millennials also invest in ELSS to save tax. ELSS is a type of equity mutual fund which invests most of your money in stocks and has a compulsory 3-year lock-in. ELSS enjoys a tax deduction under Section 80C up to Rs 1.5 Lakhs a year. The returns you get and the money withdrawn after 3 years are tax-free.
Yes, Millennials save and invest for a bright future. Recessions and job losses have scared them. Millennials continue to borrow heavily, availing credit cards and personal loans. Yet, they do save and invest. Be Wise, Get Rich.
Mr. C S Sudheer is the founder and CEO of IndianMoney.com – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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