5 Simple Financial Instruments I trust as a Homemaker

Lockdown? Financial Emergencies? Family Urgencies?

Emergencies don’t ask for permission, they come unannounced. The 2020 pandemic is the most recent example which led to major upheaval in our lives in ways we can’t even imagine. We can’t deny the fact a lot of us faced financial stress with varying intensities.

For me, financial planning is a joint decision between me & my husband. My father always insisted on financial planning and taught me the importance of it very early in life. With my brother being in the banking sector the guidance has only increased for us. On a lighter note, being a homemaker, my partner believes my financial decisions are well thought from a much wider perspective most of the times.

Also, when it comes to the basics of finances, your approach, risk-taking ability and amount to be invested plays an important role. Financial decision making requires an experienced hand so it’s always better to consult a financial advisor. A financial advisor assesses your risk-taking abilities and suggests a plan suited to your requirement. For us, we were blessed to have the right person at home. As a family we have a balanced approach when it comes to investing, we do like to diversify at the same time and have a mix of safe instruments in our kitty.

5 financial instruments which I trust:

Public Provident Fund (PPF): 

It’s a government-backed scheme, a good option for people with a low-risk appetite as it’s backed with guaranteed returns for the masses of the country. Investing in PPF has tax benefits and also the interest earned is tax-free. The interest rates are determined by the government. There is a lock-in period of 15 years before that you can’t withdraw the full amount, which makes this financial instrument a good choice from a long-term saving perspective.


Investing in life and health insurance not only has many tax benefits but, in our country, I feel it’s imperative. With piling medical expenses and limited government backing, one must make it a point to have this financial instrument in their portfolio. Government employees do have lifelong benefits in terms of medical help however, the private sector which is the largest contributor of employment offers limited support in terms of medical facilities. Some companies offer medical insurance however the amount offered and expenses incurred rarely match so ideally one must invest in it on a personal basis as well. There are a lot of insurance providers one must choose wisely.

Life Insurance has been a preferred saving choice of the masses more from a tax-saving perspective however, there are many types of investment options that do have good returns as well as helps during family emergencies.

Precious Metals – Gold and Silver:

From time immemorial gold has been a preferred choice of savings. We may or may not invest in anything but this form is chosen by each and everyone in our country irrespective of income level as it’s considered auspicious and a must buy. However, with the gold and silver prices skyrocketing it’s not a regular investing option in the form of jewellery or coins. 

We do however have a choice in terms of Gold Exchange Traded Funds (ETF) which invests in assets like gold. Gold ETF represent gold in dematerialised and paper form as they invest in physical Gold as per their investment strategy. An investor trades in securities instead of physical gold. This option provides you with the facility of regular investments and is a much better option from an operational perspective in the ever-gold fluctuating market.

Mutual Funds:

Apart from the traditional saving instruments, investing in Mutual Funds has gained momentum in the last few years with the increased awareness levels. Mutual funds have something on their plate for every saving need and every type of risk appetite. 

One may ask what’s a mutual fund?

Infographic 1 (Above picture is for illustration purposes only)

Then the next question which comes to mind is why?

Infographic 2 (Please contact your financial advisor to understand the complete details of the tax benefits.)

This type of instrument does have risk however, it’s much better than risks in direct stock investments. Here via investing in a fund, you invest in multiple stocks/securities based on the investment objective of the scheme so your risk is spread. The returns linked to the markets.

Infographic 3
Infographic 4

One does gain from investing in Mutual Funds however, due to the sheer number of options, pros and cons one must rely on his/her financial advisor for the right funds. You can choose as per your requirement of long-term saving or short-term needs. There are Overnight Funds that invest in debt instruments and can be redeemed in as short as 24 hrs. Debt Funds are a kind of mutual funds that generate returns by lending your money to the government and companies. Mutual Funds offer a lot of flexibility and saving options to meet your financial goals.

When it comes to Mutual Funds – Company Fund, Fund Manager, Portfolio and Previous performance does play a vital role in the decision-making process. You can also make fulfilling your dreams easy by investing in Mutual Funds through a Systematic Investment Plan (SIP). A SIP investment can help you save from as little as Rs.500 each month, and it can help you to accumulate a sizable amount over time to reach your goals.

National Pension Scheme (NPS):

NPS is a social security initiative by the Central Government open to employees from the public, private and even the unorganised sectors except those from the armed forces. The scheme allows one to invest in a pension account at regular intervals. After retirement, the subscribers can take out a certain percentage of the corpus and receive the remaining amount as a monthly pension.

This does not offer guaranteed returns like PPF however till now it has given returns between 8-10%. It offers tax benefits; this is a good option for private employees.

As a homemaker what are the financial instruments you trust, do share your experiences. Also, always have the habit of reading the related documents before investing to understand the scheme type, investment patterns and the risk factors associated with particular investments and consult your financial advisor to understand the implication and terms of any investment.

Disclaimer: This information is for general information only and does not have regard to the particular needs of any specific person who may receive this information. L&T Investment Management Limited, the asset management company of L&T Mutual Fund or any of its associates; does not guarantee/indicate any returns/and shall not be held liable for any loss, expenses, charges incurred by the recipient. The recipient should consult their legal, tax, and financial advisors before investing. The recipient of this information should understand that statements made herein regarding future prospects may not be realized or achieved. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Picture Credits: Infographic 1,2 & 3 – http://www.vivro.net/blog/The-Mutual-Fund-World. Infographic 4 – https://www.basunivesh.com/types-of-mutual-funds-in-india/ Other Images – Pixabay


  1. As someone who is new to the world of growing money, this information is very useful indeed.

  2. Financial planning and rational investments are so neccessary for a homemaker. PPF is a good and long-term investment. For more returns a good Mutual Fund is definitely an option.

  3. I remained a student of finance and holds years of experience in the banking industry and I can say that you made the perfect selection of financial instruments ideal for the future security.

  4. This is an amazing post on finances. My dad will love this. Thank you for sharing. Very helpful!

  5. Yikes. From the above I only know about saving some gold. I haven’t still gotten around learning where to invest in mutual funds though I have read a lot on it.

  6. I too have started with small investments now in PPF and of late have been investing in crypto currencies. Its a great way to secure for future and retirements.

  7. I definitely have to look at the mutual funds. I have never invested in mutual funds and would like to explore more. I definitely have a PPF account where I do put in some money every year.

    1. Also, I think I should add gold or silver to my portfolio of investments. I do not buy any metals and I think I should start looking into buying some. Really great list, making me really think and explore.

  8. Your post has come at the right time as I’m thinking of investing in mutual funds through a Systematic Investment Plan (SIP). I’ve been generally investing in fixed deposits.

  9. We as a family invest in many avenues and one of the most preferred is mutual funds as with a professional and experience fund manager you can enjoy the equity market benefits on your fund.

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