Most of us invest with the intention of getting sky-rocketing returns as soon as possible and without any risk to lose the principal amount. And probably this is the reason why the majority of the Indian investors look out for the top investment options where they can double their money within a few years or months with no or little risk.
However, getting such a plan is practically impossible as there are no investment opportunitiesthat offer high returns with no to little risk. In reality, returns and risks are directly proportional, which means higher the risk, higher would be the risk and vice versa.
Analyze your risk profile first
Therefore, before selecting an investment option, it is suggested to analyze your own risk profile and match it with the investment option that you are considering for investment. There are some investmentoptions that give higher returns but have higher risk profiles whereas there are some plans that have lower returns and the risk associated with them are also low.
Generally, the investment options in India can easily be divided into two categories – financial options and non-financial investment options. The financial investment options can be divided into market-linked products such as mutual funds and stocks, and non-market linked products or fixed income products such as fixed deposits, public provident funds, etc. On the other hand, the non-financial investment plans are the investments that are associated with real estate investment and investment in gold.
In this article, we are going to discuss best investment plans available in India:
1. Equity Mutual Funds:
The equity mutual funds majorly invest in the equity stock. According to the Securities and Exchange Board of India (SEBI), an equity mutual fund scheme should invest its 65% of its assets in equity related instruments and equities. You can manage your equity-related funds either actively or passively.
2. National Pension Scheme:
The National Pension Scheme or NPS is an investment for retirement. This product is managed by the Pension Fund Regulatory and Development Authority (PFRDA) and is a long-term investment plan. The minimum yearly (March to April) contribution to keep the National Pension Scheme account active is reduced from rupees six thousand to rupees one thousand. This scheme is a mix of fixed deposits, equity, government funds, liquid funds, and corporate bonds. It depends upon your risk appetite to define how much money you can invest in your equities through the National Pension Scheme.
3. Senior Citizen Saving Scheme (SCSS):
The Senior Citizen Saving Scheme is one of the must-have investment plans for retirees. As the name of this plan suggests, it can be availed by early retirees and senior citizens only. So, anyone who is more than 60 years of age can avail SCSS either from a bank or post office. This plan has the tenure of five years and upon maturity of the scheme, one can extend it for a further three years. The current interest rate on SCSS is 8.3% per year and is completely taxable. The upper limit of this investment is Rs.15 Lakh and one can open more than one SCSS accounts.
4. Debt Mutual Funds:
These funds are recommended for the investors who want steady returns from their investments. This investment option is less volatile and hence it is comparatively lesser risky than the equity funds. The debt mutual funds majorly invest in corporate bonds, treasury bills, commercial papers, government securities, and various other money market instruments.
5. Fixed Deposit (FD) of Bank:
One of the safest choices to invest in India is in Bank’s fixed deposit. As per the rules of deposit insurance and credit guarantee corporation (DICGC) every bank depositor is insured with a maximum of Rs.1 lakh for both interest and principal amount. According to one’s need, one may opt for cumulative, yearly, half-yearly, quarterly, or monthly interest option. The earned interest rate is added in the investor’s income and is taxed as per the slab of one’s income.
6. Public Provident Fund:
It is one of the most preferred investment plans. Since Public Provident Fund or PPF is a long-term investment wherein you invest for 15 years, thus the compound interest that you get is huge and tax-free especially in the later years of the investment term.
7. Gold:
Gold is considered one of the safest investments since ages in India. However, investing in gold jewelry has safety concerns and is high in cost. Moreover, there is making charges that most of the times range from 6% to 14% of the gold’s cost and sometimes it goes as high as 25%. However, purchasing gold coin is still one of the better options in this case. Another alternative of owning gold is paper gold, which you can do through gold EFTs. The buying and selling of paper gold occur in the stock exchange (BSE or NSE). On the other hand, investing in Sovereign Gold Bonds is another option for owning paper-gold.
8. The Taxable Bonds of RBI:
The government of India has replaced the former 8% Savings Bonds (Taxable) with 7.75% Savings Bonds (Taxable). These bonds have a tenure of seven years and can be issued as a credit to the BLA (Bond Ledger Account) or demat form of the investor. The investor also gets the Certificate of Holdings as an investment proof.
9. Real Estate:
The home that you purchase for your living purpose is not considered as an investment instead of the second house that you purchase and do not have any intention to live there, is considered as an investment. The location is one of the prime factors to decide the value of your property in future and the rental income that you will get from it. However, the real state is very liquid in nature, unlike other asset classes.
Final Words:
Some of the mentioned investment opportunities are fixed income plans whereas some are market-linked. Both these investment options play an important role to create wealth. On one hand where market-linked investment plans help to navigate volatility and in that process they generate high returns. The other hand, fixed income investment plans allow preserving the accumulated amount so that one can easily meet his/her desired future goals. However, to fulfill your long-term goals, it is important to invest in both the types of investments. So, select plans from both the investment options as per your risk appetite and make your future financially stable.
Article Submitted By Community Writer
