Secured investment Option
You can think of safety and guaranteed returns by putting your money in fixed deposit schemes of banks.

Earlier there was a concept in our state that people would often consider the banks as a depository institution, limited to the function of being a place where one can keep his money safe. Just some two decades back, I would seldom find people who'd consider depositing their money in banks because of earning some interest. But over a period of time, this concept saw erosion in the minds of people. Their priority shifted from safety of money to earning more and more out of every penny they deposited in banks. It was because they were given exposure to the capital market in the beginning of the millennium. 
Notably, it was J&K Bank which became depository participant (DP) of National Securities Depository Limited (NSDL) and started operations of its depository centre in Delhi, Srinagar and Jammu on March 23, 2001. Besides, the bank also joined hands with Infrastructural Leasing and Financial Services Limited (IL&FS) to bring online broking services on the doorsteps of J&K investors. Soon the depository services of the bank attained market leadership in the J&K State.  
After the getting easy access to investment opportunity available in the capital market, we have observed bullish approach of local retail investors where they have been parking their money in various stocks. Here we can say, the local investors opted to have their money into the capital market at higher risk for higher yield instead of parking their money in fixed deposit instruments of the banks having assured safety and fairly good interest returns. 
But what we have observed is that most of the local investors have suffered losses and there are cases where even capital of an investor was completely wiped out. Why they suffered losses? Reason is simple and visible to all. The biggest disadvantage is that we don’t have financial advisory services available in the J&K which could be reliable. In addition to this, the local investors don’t give good amount of thought before making an investment decision and on this front they lack discipline. They treat investing in a stock as a short cut to become millionaire and during the course, they suffer financial losses. What we have seen in Kashmir that people mercilessly access to the stock market; buy stocks at random without even knowing the sector in which they are investing. After initial gains, most of the people have suffered tremendous losses. 
When recession hit in 2008, stock markets around the world suffered a slump and our local investors lost over Rs1000 crore due to this slump in the stock markets. After the heavy losses our local breed of investors suffered during the period, they began to realize that the stock market is a place which gives them no guarantee or safety of their money while in the  market. This has led to yet another swing in their mood and they are again looking out for safer options of investment instead of high risk borne options. 
In this context, various readers have asked about the safe options of investing money. The current hovering of thunderclouds over the stock markets following Egypt crisis has already put them on alert. Even some have narrated their tale of losses, while some have sought guidance in choosing stock market or bank instruments for investment purpose. 
There is always a choice, as to where you would want to put your money. You may take a high yield investment route through stock market but this option is on a higher risk basis. Or you can think of safety and guaranteed fair return by putting your money in fixed deposit schemes of banks. 
All Banks offer fixed deposits schemes with a wide range of tenures for periods from 7 days to 10 years.   The depositors are supposed to continue such Fixed Deposits for the length of time for which the depositor decides to keep the money with the bank.  However, in case of need, the depositor can ask for closing (or breaking) the fixed deposit prematurely or can take loan against the fixed deposit. 
In the current situation and lack of proper knowledge about stock markets among the local investors, the secured way to save money and earn guaranteed interest on the money is Fixed Deposit (FD) instrument of banks. These fixed deposits provide various types of benefits to the depositors. It serves as the safest guard of the hard-earned money for the people and provides the depositors the benefit to even withdraw their money before the maturity date without any trouble. If someone wants to avail a loan then the same person can get it up to 90% of the principal amount of the FD. In other words, one can withdraw loan against a FD. 
J&K Bank offers a basket of saving and income generating fixed deposit schemes for all segments of customers. Smart Saver Scheme, Childcare Deposit Scheme, Depositors’ Pension Scheme, Mehendi Deposit Scheme, Recurring Plus Scheme, Recurring Scheme, Tax Saver Term Deposit Scheme etc.  are some of the fixed deposit schemes tailored by the bank to suit its varied client base. 
For example, Recurring Plus Scheme of the bank suits persons with fluctuating income, as the scheme facilitates a depositor to deposit variable amounts of installments at his free will without any binding on depositing the fixed installment. A depositor can choose a minimum core monthly installment of Rs.100 and is free to deposit a selected core amount or in excess of core amount in multiples of Rs.100. Then there is a special savings scheme for the girl child. Known as Mehendi deposit scheme, a depositor has to invest one time amount in the scheme to choose Rs.25,000, Rs.50,000 or Rs.1,00,000 maturity amount for his/her girl child for a certain period. The scheme carries free accidental insurance cover equal to the maturity amount, which the depositor chooses. 
The bank offers Millennium Deposit scheme, in which a depositor can invest his money in the units of Rs.500 and withdraw a certain portion of his deposited amount in the units of Rs.500 at the time of need without any penalty. Yet another product, JK Bank Daily Deposit Scheme has been tailored as a doorstep banking facility. The Scheme is catering to the requirements of those small businessmen/professionals who have the potential to save some amount of their sale proceeds at the end of the day/week and also earn interest on the deposited amount.
You can make one time investment in the fixed deposit instruments of the bank like cash certificate, flexi deposit scheme, fixed deposit receipt etc. Thus, if you have little knowledge about the capital market and inability to analyse the movement of stocks, you should always park your hard earned money in one of the above mentioned fixed deposit schemes of the bank. This would definitely earn you peace of mind, as, firstly, you don’t have to worry about the safety of your money and secondly, you will earn guaranteed rate of interest on your investment.

(The views are of the author & not the institution he works for. Feedback:
sajjadbazaz@greaterkashmir.com)

Lastupdate on : Sun, 13 Feb 2011 21:30:00 Makkah time
Lastupdate on : Sun, 13 Feb 2011 18:30:00 GMT
Lastupdate on : Mon, 14 Feb 2011 00:00:00 IST