Reasons for Investing

Some of the investment reasons are to:

Compound Your Money

This is one of the primary investment reasons. All of us want to grow our money into a
decent corpus for various short and long-term goals. For this, it’s important to invest in
various financial instruments as per your goals and risk appetite.

Earn a Steady Source of Income

Investments are also made to earn a steady source of income. For instance, when you
invest in a fixed deposit, you earn interest every month that you can avail to supplement
your existing income. Similarly, you can set up a systematic withdrawal plan in mutual
funds for a regular income.

Lower Tax Liability

Another reason for investing is to bring down your tax liability. Investments in various
financial tools qualify for tax exemption under various sections of the Income Tax Act,
1961. For example, investments in an equity-linked savings scheme, public provident
fund (PPF), national savings certificate, etc., qualify for tax exemption under section 80C
of the Income Tax Act, the ceiling of which is ₹ 1.5 lakhs in a fiscal.