Surprisingly Powerful Investment Options For Musicians

By | March 20, 2018

If you’re a full-time musician plying your trade in the Indian club circuit but have no idea about what to do with your money then look no further. Here are some investment options to rock your world.

Most people don’t realise that being a full-time musician takes a lot of dedication, sacrifice and hard work. While you’re up on stage rocking out with hundreds of people singing along, the struggle seems totally worth it. However, once the lights go down and you head back home, you’re back to counting change in your pocket to pay for your rickshaw ride.

This scenario rings doubly true here in India. Musicians, especially rock musicians, always seem to hover around the periphery of society. Not quite accepted and never quite fitting in anywhere. In fact, in some circles, they are even frowned upon, thanks to Indian society’s vision of its sons and daughters growing up to become doctors, engineers or cricketers.

Two of the biggest issues plaguing musicians in India is the chronic lack of monetary compensation for their performances and the chronic lack of any sort of financial nous. Most musicians aren’t particularly finance-savvy. Concepts like ‘saving’ and ‘investing’ are practically alien to them. After all, rock n’ roll is all about having a good time.

While that may certainly ring true, it would certainly hold you in good stead if you happen to be a full-time musician AND took the time to figure out how you can make your money grow, especially if you do happen to get paid once in a while. By investing, you not only secure your future to a great extent, but you also have something to fall back on, because let’s face it, being a full-time musician in India has to be one of the most unstable jobs on the planet. Someone could pull the rug out from under your feet at any moment, which is why your investments could not just cushion your fall, but help you get back on your feet.

There are some great avenues open to all musicians when it comes to investing money. All it takes is to apply the same amount of discipline you pour into your music, into investing. So put that guitar aside for a minute and let us walk you through some great investment products that will sound like music to your ears.

You may already know what a Fixed Deposit is, but you’ve probably never really given it much thought in between songwriting sessions. To put it quite simply, a Fixed Deposit account is an account you open with a bank, into which you place a certain amount of money for a fixed period of time. The bank then pays you interest based on the tenure of the deposit and how much money you decide to place into the account. Fixed Deposits are considered extremely safe investment options since they aren’t affected by market risk or fluctuations. This means that regardless of what happens, you are guaranteed returns on your initial investment. Placing a sizeable amount in a Fixed Deposit can earn you a decent chunk of change to tide you over, especially if you find your expenses are mounting. You can choose to get your interest pay-outs either at the time of maturity of the deposit or on a monthly or yearly basis

Another cool feature of a Fixed Deposit is the ease with which you can withdraw the money you placed in it. For a small penalty charge, you can withdraw the entire amount in case you are in urgent need of funds or need money to take care of a sudden financial emergency. Fixed Deposits also encourage you to get into the habit of saving. Since the only way to earn interest on your initial investment is to keep the money ‘locked’ in, chances are slim that you will be tempted to withdraw it and blow it all up.

Since Fixed Deposits tenures are flexible in nature, you can choose a period of investment that can range anywhere between 1 month and 10 years, depending on your financial needs. The longer your investment period, the greater your chances are of ending up with a substantial return on your investment.

Additional Reading: Benefits of Fixed Deposits

With so many banks to choose from, it can be a fairly daunting task to choose who to place your money with. To make your life easier, we’ve put together a list of 7 banks that offer Fixed Deposits at attractive rates of interest, which should help you make an informed choice.

  • ICICI Bank – ICICI Bank offers Fixed Deposits with interest rates going up to a maximum of 8% to 8.5%, with the option of monthly or quarterly interest pay-outs.
  • Union Bank – Fixed Deposits with Union Bank come with a maximum interest rate of 8% to 8.15%, with the rate of interest compounded every six months. Monthly interest pay-outs can also be opted for at a discounted rate.
  • Punjab National Bank – Punjab National Bank offers Fixed Deposits at a maximum interest rate of 8.15%, with the option to receive interest payments every month or every quarter. You can open a Fixed Deposit with an amount as little as Rs. 100 and as high as Rs. 99.99 lakhs.
  • Axis Bank – Axis Bank offers Fixed Deposits with no maximum deposit limit, with interest rates capped at 8.2%. However, a minimum amount of Rs. 10,000 is required to open up an FD account.
  • Bank of Baroda – Bank of Baroda offers Fixed Deposits with interest rates rising up to a maximum of 8.25%. You can open up an FD with a minimum amount of Rs. 1,000 with tenures ranging anywhere from 6 months to 10 years.
  • Yes Bank – Fixed Deposits at YES Bank come with maximum interest rates of 8.25% and with tenures ranging from one week all the way up to 10 years. Interest is compounded quarterly, but you can choose to receive interest pay-outs every month at a discounted rate.
  • Kotak Mahindra Bank – Kotak Mahindra Bank offers Fixed Deposits with maximum interest rates of 8.2%. Interest is compounded monthly and an FD can be opened with a minimum amount of Rs. 10,000. 

Additional Reading: Everything You Need To Know About Fixed Deposits

Another great way for full-time musicians in India to make their money grow while they’re out doing what they do best is by investing in Mutual Funds. A Mutual Fund is basically a professionally managed money pool in which many investors contribute funds for the purpose of saving money or earning returns on their investment. All risks, gains or losses are shared among the investors depending on the amount they have contributed to the total fund.

You can apply for Mutual Fund schemes extremely easily in this day and age. With the power of the internet at your disposal, you can invest in a Mutual Fund scheme online right from the comfort of your own home. While some people choose to make use of agents or middlemen to help them invest in various funds, it is becoming increasingly common for investors to independently decide which fund to invest in by conducting their own research. This makes the entire process a lot cheaper since there are no commissions involved.

There are a ton of great reasons to invest in Mutual Funds. The features outlined below should give you a broad idea of why Mutual Funds are a popular investment vehicle for investors across the country.

  • Mutual Funds are professionally managed by fund managers who help investors decide which funds to invest their savings in. Since most investors are fairly wet behind the ears when it comes to all things related to finance and investment, these fund managers use their considerable knowledge and experience to help them earn great returns on their investment.
  • Mutual Funds also tend to be low-risk investments, making them perfect investment vehicles for anyone who is looking to combine good returns with minimal risk. Since Mutual Funds spread investments over a number of stocks or securities, the chances of suffering massive losses are extremely low.
  • What makes Mutual Funds a great investment option for full-time musicians is the affordability it offers. Investing in Mutual Funds do not require huge amounts of money, and practically anyone from any income background can invest in them.
  • Mutual Fund schemes also offer investors a range of tax benefits. Any individual investing in these schemes can automatically avail of income tax deductions when filing his or her tax returns.
  • Medium and long-term Mutual Funds also have a history of providing investors with substantial returns over a period of time, and since all funds are regulated by the Securities Exchange Board of India, it is considered to be an extremely safe investment vehicle.
  • Mutual Funds are also easy to keep track of since statements are provided to investors on a regular basis. This makes it extremely convenient for investors who are constantly on the move and are strapped for time.

Just like Fixed Deposits, there are a plethora of Mutual Funds for you to choose from but worry not because we’ve put together a list of 5 Mutual Funds you might definitely be interested in.

ICICI Prudential Mutual Fund boasts of an AAAmfs CRISIL credit rating for a large variety of their products. Investors, both large and small, can easily invest in the incredible number of funds available to them, such as Equity Funds, Debt Funds, Hybrid Funds and much more.

HDFC Mutual Fund is India’s largest Mutual Fund Manager with a wide range of investment options available to potential investors. Most products on offers have a minimum CRISIL rating of 3 and are tailor-made to meet the needs of every type of investor. HDFC Mutual Funds also offer attractive tax benefits, with both long term and short term funds available for investors to place their money with.

  • AXIS Mutual Fund

Axis Mutual Funds offer a wide range of funds to invest in with the added advantage of choosing your own dedicated relationship manager. Investors can also receive reports on their investments via internet banking. With 73 different scheme to choose from, investors can spread their money, thereby lowering their risk potential and ensuring good returns over a period of time.

SBI Mutual Funds are designed to meet the needs and requirements of a large range of investors and financial entities, with both domestic as well as foreign funds on offer. SBI Mutual Fund schemes are also open to non-resident Indians, and investments can be made and accessed easily online at any time.

Franklin Templeton Mutual Funds specialise in investing in funds that are not prone to market fluctuations, thereby reducing the investor’s exposure to risk and potential loss. By investing in schemes such as the Franklin India Tax Shield, investors can also avail of tax deductions under Section 80C of the Income Tax Act.

Additional Reading: What To Remember When Investing In Mutual Funds

That should do it. By keeping these investment options in mind, you could be well on your way to stardom, safe in the knowledge that your money is working as hard as you are behind the scenes.

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Category: Investments

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