To make money from your savings you have to make a calculated financial plan. There are many ways to invest your savings. You will not get rich in a day by investment but you will get a substantial amount of return by the investment in right direction. Initially you have to study about the risk & return from the investment in a short term & long term basis.
There are many types of financial institutions which take deposit from the investors. Bank offers short term saving bank deposit or long term deposit like F.D (Fixed Deposit), R.I.P. (Reinvestment Plan), similarly the Post Office has N.S.C. (National Savings Certificate). Many finance companies offer Mutual Fund Investment. You can directly investment in stocks or bonds.
To choose between the long term investment & short term investment you have to set a goal. Why do you want to invest, for retirement, for college education or for purchasing a house? You have to choose the type of investment according to the length of time when your money will be required. Stocks, mutual funds are the long term investment & the return of it depends on the market situation. At the time of downward trend of the stock market if you want to cash the stock for urgent need you will not get the proper return.
Next thing you have to know about the risk factors & your risk tolerance. The general perception is that small return is more secured than higher return from investment. In our country term deposit like “F.D./ R.I.P./ R.D. in Nationalized Bank or N.S.C./ K.V.P. in Post Office is the most secured long term deposit, because the Central Government is the guarantor of it. But the return is very low. On the other hand investment in stocks, mutual funds, bonds are risky. The return depends on the trend of the market. You have to calculate the risk tolerance before investing in it.
In my opinion you should spread your investment in different types of investment. To avoid the major loss of your investment you should keep at least 30% of deposit in long term deposit of Nationalized Bank or Post Office. The rest portion spread between the stock, mutual fund & bond. Though the return from stock is high yet try to keep minimum portion in it for its high risk factor. Thus you will get a combined decent return irrespective of the situation of the market.