Best Investment Options for Fleet Owners in India
Published By: LogiPe on September 30, 2022
Why investment is important for fleet owners
Running a fleet management business requires the owner to handle many factors simultaneously. Such factors include fluctuations in supply and demand, changing availability of drivers, competition from others in the same sector and varying regulations. In the middle of this constant flux, there is the fact that profit margins are shallow in the industry. A competent fleet owner has to make the right decisions to keep the firm in good financial health.
When a logistics firm is in good financial health, it can seek to expand and find new horizons. Such an opportunity allows the company to find new markets and customers to offer their services. However, the owner must address various matters before choosing to expand. Identifying fleet needs, and choosing the right vehicles for expansion is one such facet. Equally important is estimating the return on investment on any new vehicle or technology added to the fleet. Considering factors such as the ones above helps ensure the result of the expansion benefits the firm in the long run.
Caption: Investment is a key process that fleet owners must familiarize themselves with to help their firms grow.
We have seen that the expansion of a fleet business needs prior planning. Just as necessary is the procurement of capital in terms of funds. Significant upgrades and additions to the fleet require a sizeable influx of money. This money can partly be sourced via savings made from earnings. Another important source of income in such cases is an investment in other sectors.
Investment helps the firm earn a steady income that it can divert to major upgrades to the fleet. It also reduces the need to rely solely on profits to take the logistics firm to the next level. Beyond helping in expansion, the income from investment can help in times of lower demand and profits. With uncertain and often delayed cash flow, such revenue can stabilize ripples.
What are the different ways to invest money for fleet owners?
Fleet owners have to pick their mode of investment very carefully. As we have seen before, they must have a sound understanding of the company’s financial health and needs for the future. Once these have been identified and understood, investment plans can be discussed. The fleet owner must understand their appetite for risk before making suitable choices. Here we discuss some prominent investment plans available in India.
Fixed Deposits (FDs) provide a stable source of income for a single deposit. The level of security is high. Interest earnings are credited regularly. The interest rate, however, is relatively low, ranging between 3-7% per annum. Further, the higher interest rates are available only after a longer duration of the investment.
Recurring deposits are investment plans similar to FDs. The difference is that recurring deposits require regular savings from the investor instead of one lump sum in the case of fixed deposits. These are also relatively high-security investment options like fixed deposits. However, they also offer low-interest rates, in the range of 5-7% per annum. They also need long-term, regular commitment. Premature withdrawal leads to fines.
Mutual funds pool resources from a group of investors and invest the resources in various stocks from leading companies. Unlike fixed and recurring deposits, earnings are not guaranteed. The inherent nature of market investment makes the process risky, and losses can happen. However, when carefully chosen, the yields can be higher than those from FDs or RDs.
Direct equity investments
Fleet owners can also consider directly buying shares from a company as an investment. Unlike mutual funds, the process doesn’t involve other parties. The investor can choose the portfolio based on their assessment of the market and companies. However, this could be risky for the average fleet owner, as they will be expected to gain significant knowledge of the stock market to avoid losses.
Bonds are another option for long-term investments like FDs. They are effectively loans to governmental institutions with the physical property as collateral. As a result, they are relatively secure. They tend to pay higher than FDs after tax, and tax-free options exist. However, they are less easy to obtain than FDs for the average investor. They are also more volatile in pricing, as bond owners can sell them on the market.
How LogiPe can help fleet owners with investment
It can be confusing for fleet owners to pick one among the many investment options available today. Each has its pros and cons. Finding one suited to a particular business’s needs can be difficult.
We atLogiPeunderstand the significance of viable investment options for fleet owners to boost their earnings. Within the range of financial services we offer, we provide an investment feature too: LogiDeposit. It is a flexible investment option that helps cater to the needs of fleet owners.
LogiDeposit: the features
LogiDeposit is an investment platform for select LogiPe users. On LogiDeposit, fleet owners receive profitable returns of 8%, higher than options such as FDs. The interest earned is also credited daily into the user’s account, compared to the monthly frequency of FD deposits. This regularity provides a steady stream of revenue.
An investor has to invest a minimum of ₹1000 in LogiDeposit, up to a maximum amount of ₹ 5 lakhs. Once the fleet owner invests, they can make further deposits and withdrawals at any time. However, the minimum deposit time to earn interest is 15 days.
Using LogiDepost, fleet owners can find a flexible, lucrative source of revenue to meet their needs. These earnings can help them take the next big step toward meeting their goals as a firm.
Investment is a crucial activity fleet owners must involve themselves in. It helps them prepare for the future and provides security to their companies. Investment also helps provide funds when major upgrades like scaling up the company occur.
LogiDeposit by LogiPe provides a reliable source of income for fleet owners. LogiPe offers a range of financial solutions for logistics companies, addressing various pain points in the payment process.Visit us todayto learn about our features and how we help modernize payments in the logistics sector!