There are several long-term and short term investment options which you can opt for, considering your goals and risk appetite. Many top investment options in India offer additional returns in the form of guaranteed additions. At the same time, it is prudent that you consider diversifying your portfolio with good investment options for maximizing returns and minimizing associated risk.
Some of the top Investment Options in India
Listed below are some of the best investment options in India :
1. Fixed Deposits
2· Mutual Funds
3· Direct Equity
4· Post Office Saving Scheme
5· Bonds
6· National Pension Scheme (NPS)
7· Unit Linked Insurance Plans (ULIP)
8. Liquid Funds
9· Public Provident Funds (PPF)
10. Senior Citizen Savings Scheme (SCSS)
Let us look in detail at some of the best investment options available in India for growing your money:
1. Fixed Deposits (FD)
Fixed deposits are often considered amongst the safest, stable, and among the best short term investment options. You can invest in fixed deposits for the following reasons:
- To accumulate higher returns from various FD schemes
- Hassle-free renewal each year will give you compounding benefits
- Fund security
- No depreciation on the principal amount
- No market fluctuation effect
- Guaranteed returns
All these reasons make a fixed deposit one of the best investment options, which also offers guaranteed returns. If you are seeking a healthy balance between returns and safety, you can start investing in fixed deposits as soon as possible. You can also opt for a monthly basis saving option provided by most banks and other financial institutions.
2. Mutual Funds
While investment in mutual funds is subjected to market risk one should evaluate the risk before investing. If you understand the market and its risks, mutual funds can become your best investment options to grow money multifold. Whether you are going for short term investments or long term, you can create an investment portfolio based on your preferences.
If you have a lower risk appetite and want a fixed income from mutual funds, monthly systematic investment plans, or systematic withdrawal plans can be good investment options. It can also be a favourable choice if you are looking for a high return investment in India.
3. Direct Equity
One of the first things you should figure out is whether you are looking for long term or short term investments. Direct equity investing is one of the best investment options for long term purpose. It is about the equity shares of a company, which binds you in legal terms related to the company ownership.
By buying a company’s shares, you also get the right to get involved in company meetings and have your say on the company’s decisions. Also, you get the profits as distribution in proportion to your shareholding in the company.
As an investor, you must know that a company’s performance has an impact on the share price, both positive and negative. Depending on the market conditions and your risk appetite, you can also choose to give up the shares back later either to the company or a third party.
4. Post Office Saving Schemes
These are deposit avenues for investors made available by India Post, the body that controls postal chain in the nation. This investment option was once introduced to help people inculcate the habit of disciplined savings in life while also providing investment avenues to aid in financial planning.
What makes these schemes one of the best investment options is the ease of enrolment or application. You can invest in these savings schemes by visiting the nearest post office branch.
Saving schemes that fall under post office investments include:
- Post Office Savings Account
- Post Office Time Deposit Account (TD)
- 5-year Recurring Deposit Account (RD)
- Monthly Income Scheme Account (MIS), and many others
5. Bonds
Just like individuals, companies and government bodies need fund for infrastructural development and social programs, for which they issue bonds to the public markets. The interested investors then buy the bonds to help these entities raise money.
In other words, bonds are fixed-income investment options that cover the loan made by an investor to a corporate or governmental borrower.
What makes them one of the best investment plan in India is that the terms for fixed interest payment, loan principal, and tenure are all included in the bond details. Hence, it assures you of the safety of your investment along with an additional return.
Also, bond prices are inversely proportional to the offered interest rates. It means that these price fall when interest rates increase and vice versa.
6. National Pension Scheme (NPS)
National Pension Scheme is a government-initiated investment option, which have the objective of securing the financial life of a citizen after retirement. Think of NPS as the best investment plan in India if you have minimal or no risk appetite and want to save for your retirement.
Under this scheme, you can invest in government bonds, equity, and other alternative investment options as per your preference. Not only NPS is one of the best investment options, but it is also the safest option to save and grow money for retirement. You can start investing in the National Pension Scheme starting from Rs 500, having an interest rate of ~8-10%.
7. ULIP
Another investment option for individuals who want market linked returns along with insurance is Unit Linked Insurance Plan (ULIP). You can buy a life insurance which helps to invest in different funds and give you life cover option at the same time. ULIP has become one of the best investment plan in India.
This top investment option in India offers dual benefits of insurance and market investments, which helps you systematically grow your money. You can choose the most suitable policy tenure based on whether you prefer long term or short term investment options. Additionally, ULIP also offers tax benefits under section 80C of the Income Tax Act 1961.
8. Liquid Funds
Liquid funds are like stock market investments, wherein money is invested in government bonds and securities. Since there is no lock-in period, it allows you to withdraw money as per your requirement; thereby making it one of the best investment options in the market.
When it comes to short term investments, liquid funds are the one of the best investment options in India. You can invest in it for 3-5 years and withdraw money as per your requirement for fulfilling your short term goals. They are less subject to market risks than mutual funds, which also makes it one of the best investment options.
9. Public Provident Fund (PPF)
A government-backed investment option, Public Provident Fund, provides you risk-free returns making it one of the best investment options. The interest is revised and paid by the government every quarter.
Although the maturity period of PPF is 15 years, you can start the partial withdrawal of your money after completion of six years. However, you can also use your PPF balance as security to take loans. It falls under the EEE category of tax savings, since the principal amount, interest earned, and maturity amount – all are eligible for tax savings. Thereby PPF is one of the best investment options available. As per Section 80C of the IT Act 1961, you can avail tax deductions for your contribution towards the PPF account.
10. Senior Citizen Savings Scheme (SCSS)
It is one of the best investment options backed by the Government of India and is meant for people above 60 years of age. The amount deposited in this scheme matures after five years from the date on which the account was opened. It can also be extended for once for the next three years.
What attracts senior citizens in India to this scheme the most is the interest gained over savings. Currently, the SCSS interest rate is 7.4% as of Quarter 1 for FY 20-21, which is the highest amongst other saving schemes available in Ind Types of Investment & Their Risk Profiles