The "Zero-Trust" Policy
Assume every investment is a scam or a bad deal until it proves otherwise. Do not rely on the reputation of the person selling it. Rely on documents, databases, and mathematics.
Phase 1: Regulatory & Legal Verification
Before looking at returns, we must confirm the entity exists legally.
SEBI / RBI Registration Check
Does the entity have a valid license number? (e.g., INA000012345). Go to the official SEBI Intermediaries Database and search that number.
Pass Condition: Name on database matches website exactly.
Fail Condition: "No record found" or name mismatch.
The "Sovereign" Test
Is this a government scheme (PPF, SSY)? If yes, are you applying through a verified bank or post office portal? If it's a private "Govt-approved" agency, verify their authorization letter.
Payment Gateway Audit
Where is the money going? It must go to a Corporate Current Account or a Clearing Corporation (like ICCL/NCL). Never transfer to a personal savings account or UPI ID.
Phase 2: Mathematical Viability
Scams often promise math that doesn't exist. Real investments follow the laws of compounding.
The "Risk-Free" Rate Comparison
The current Government Bond yield is roughly 7%. If an investment offers 12% "Guaranteed," it is mathematically lying. To get 12%, risk MUST be taken.
Calculate the Reality
Don't blindly believe the brochure's "Future Value". Use a neutral calculator to verify if the maturity amount makes sense.
The Truth Machines
Use these tools to audit their promises. If the calculator says one thing and the agent says another, trust the calculator.
Phase 3: Product Specific Checks
Mutual Funds: Expense Ratio
Are you buying a "Regular" plan or a "Direct" plan? Regular plans have higher expense ratios (commission to agents). Always prefer Direct plans for 1% extra return.
Insurance: The "Investment" Trap
Is this a ULIP or Endowment plan? Remember: Insurance is for protection, not investment. Returns in these plans are often 4-5% (lower than inflation). Keep Insurance and Investment separate.
Real Estate: RERA ID
Does the project have a RERA registration number? Verify it on the state RERA website to check for pending litigations or delays.
Phase 4: Red Flags & Psychology
- Urgency Tactics: "Offer expires tonight!" Real investments are always open. Urgency is a scammer's tool.
- Complex Jargon: If they can't explain how they make money in one sentence, they are hiding risk.
- The "Exclusive" Club: "Only for selected investors." Scammers use ego to bypass your logic.
- Recruitment Requirement: If you have to bring two friends to earn money, it is a Pyramid Scheme, not an investment.
Conclusion: The Power of "No"
The most powerful tool in investing is the ability to say "No" when a check fails. It is better to miss a good opportunity than to lose your capital in a bad one. Keep your money in a boring Fixed Deposit until you find an opportunity that passes all 15 checks.