The market offers a wide range of investment instruments, and most investors choose at least a few key ones that best suit their financial situation and objectives. The different types of investment vehicles are discussed below:

1. Fixed Deposit (FD)

Fixed deposits are investment instruments offered by banks and financial institutions where you deposit a sum of money for a fixed period at a predetermined interest rate. FDs are considered low-risk investments with guaranteed returns, making them popular among conservative investors.

Key considerations:

• Interest rate: Compare interest rates offered by different banks and institutions.
• Tenure: Choose a tenure that aligns with your financial goals.
• Premature withdrawal: Be aware of penalties associated with premature withdrawals.
• Credit rating: Assess the issuer's creditworthiness to gauge the risk of default.

2. Stocks

A stock, often referred to as equity, is an ownership stake in a business. Stocks are bought and sold in units known as shares. Your stake in a company depends on the type of stock and the number of shares you own. The value of shares increases with the stock price of the company, leading to capital appreciation. Many companies also distribute a part of their profits as dividends to stockholders.

3. Exchange-traded Funds (ETFs)

Similar to mutual funds, ETFs pool money from different investors and allocate it across investments. They are typically traded on stock exchanges and are more likely to be tied to a stock market index and passively managed. As such, they tend to have lower fees than mutual funds. Since they are linked to a large portfolio of stocks, they perform more predictably over an extended period compared to individual stock investments.

4. Bonds

A bond is a type of debt obligation that is issued by corporations and governments to raise money. As government-based securities, bonds carry a low degree of investment risk. However, they provide lower returns than other types of financial instruments like stocks or mutual funds. Bonds are generally considered fixed-income instruments as they provide consistent income.

5. Real Estate Investment Trust (REIT)

REIT is a business that owns, manages, or finances income-producing real estate. It can be considered an alternative to buying an investment property as it experiences continuously rising real estate costs while also earning investors income. In REIT, a pool of funds is collected from investors who prefer reaping benefits from real estate investments without having to invest, manage, or finance any real estate themselves. Similar to stocks, REITs can also be traded on the stock exchange.

The best investment vehicle for you depends on several factors, including your financial goals, risk tolerance, investment timeline, and knowledge level. It's essential to diversify your portfolio across different asset classes to mitigate risk.

Remember, investing involves risk, and there are no guarantees of returns. It's crucial to do thorough research, understand the investment products you choose, and consider seeking advice from a financial advisor if needed.

If you are looking for safe investment option, then you can consider investing Bajaj Finance Fixed Deposit. With a top-tier AAA rating from financial agencies like CRISIL and ICRA, they offer one of the highest returns, up to 8.60% p.a.