5 best ways to invest for college students

best ways to invest for college students

While Money doesn’t grow on trees, It can grow if you start saving and investing wisely.


Investment from a young age develops practical knowledge of finance in the students. 


Understanding the importance of investment will be one of the most helpful things in the early days of your career. Every student should have a basic understanding to help themselves manage their finances. Investing for college students will help them take small and calculated risks without affecting their future.


It’s a common mindset to think that regular investing or trading from a young age might not be an ideal choice. 


Due to a lack of experience in the field, investing might come as a foreign subject to many college students. But students who start investing at a young age have several advantages over the others. 


As it’s often said, Catch them young which will help you inculcate habits that will go a long way in your future. Investing young practically allows you to:

  • Get enough time for understanding the fundamentals of the market
  • Less risk of losing money
  • More time to recover from market volatility
  • Discover which strategy works for you


Investing as a student will help you understand how to make money work for you. Take it this way, There are two ways to make money:


Work for Money – The most basic way where you work for others or have your own business to earn money. 


Money work for you – An additional way for you to learn how to make your money work in a way that it grows. Investing is the best solution for that.


So here we are going to discuss the 5 best investment plans for students to start with a small amount of money and grow big in their future. 

5 Best Investment Plans for Students

1. Mutual Funds

A mutual fund is a pool of investments by shareholders which are invested in diversified holdings. Diverisifying your portfolio by investing your money in different places lowers the risk of losses. Investing in mutual funds is a great way of starting your investing journey in your early years. They are managed by professionals, so you don’t need to be an expert from the start, which is a win-win. 


Nowadays investing for college students has become easier through SIPs i.e Systematic investment plans. SIP allows you to invest an amount of money at regular intervals. SIPs can be started as low as ₹100. You can start by putting ₹500 every month into a SIP from your pocket money as well. 


Putting a small amount regularly will give you a headstart on your investing journey and create a healthy investment habit. It is one of the best investment plans for students as it reduces risk and provides a chance to earn high returns over a long period. The power of compounding is really impressive when it comes to investing. And the biggest factor to earn high returns is just to start early. 


2. Share Market

Trading for college students is beneficial in many ways. It will give ample time to learn from their mistakes and recover from them. It will help understand the strategies that work and that don’t. 


Investing for college students can start with growth stocks that generate positive cash flow and whose profits are expected to increase at a faster rate than the other competitions within the industry. Holding onto these stocks for the long term will give you great returns too. 


Stocks do hold a high-risk position but starting early will help you recover from the volatility of the market and won’t be affected by huge losses. Investing for a student is an experience that will help you in your future to make the right choices in the market.


3. Deposit Schemes

FD is something we have been hearing since a very young age from our parents. It was the first and only choice of investment in terms of money for most of our parents. 


But what is an FD? 


Fixed deposits (or FDs) mean that your money is deposited for a particular period with a particular interest rate. It is undoubtedly the safest investment option. 


If you have little to no experience in investing but do have the money to put in, put it in a fixed deposit until you learn how to invest it further. It’s providing a higher rate of interest on your money by the banks than it would have got if the money was just sitting in your savings account. 


4. Bonds

Bonds are a safe way to create fixed and higher income with a low-risk investment plan.


Bonds are money taken by the government and corporate companies from the public in return for fixed interests. 


There are two types of bonds – long term and short term bonds. 


Long term bonds usually have higher interest rates than short term ones. Your money is invested for a particular interval of time and on maturity, you get your principal amount with interest. This is also one of the safest ways to invest your money. 


5. CryptoCurrency

Cryptocurrency has been around for quite some time now. But it was recently seen as a booming market. The volatility of crypto is the highest when it comes to investment. 


Investing for college students in crypto for a very little amount is a suitable idea. It’s a newer asset class and hence investing a lot of money is not advisable because of the high risks it comes with. 


Start by investing a small amount in Crypto to stay in this new investment plan and not miss out on the perks provided by it. 

Importance of Investing for students

Knowing how to manage your finances will be one of the best skills you’ll possess. 


Investing for students just needs to have the basic knowledge to start. And because as college students you have ample time to learn. 


It won’t matter how little money you have for investing. Small Savings make big money. You can start with as little as you have. The key is to learn during the initial years and build a habit eventually. 


No guarantee comes with investing. But if you go through the facts for investing and start following some of the best investment plans for students, you’ll be able to gain financial security over the years and also enjoy the perks of managing your money from a young age in your future. 


The key takeaway is to start young and not only invest in money but also time and let it do wonders for you.

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