It is not about building the intent and discipline to save for your goals, but about having the ‘hygiene factors’ in place that are essential to begin investing. They may be prescribed by regulators such as the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI), or specifically by the investment and service providers. The eligibility to invest, and the efficiency with which the investments are made and managed, will depend upon these four factors being in place.
Bank Account
Most investment products require payments and receipts to be channelled through the banking system. Cash as a mode of making payment is restricted to investments such as the government’s small savings schemes, the National Pension System (NPS) and mutual funds that accept cash up to prescribed limits.
