Best Investment Options in India

Best investment options in India: 

A great sage has said that saving money is more important than earning money. We should learn to save money to ensure our bright future because today’s life is quite insecure. In today’s era, even big millionaires become bankrupt, so what is the status of the general public.

We have to invest the rest of our money in the right place to remove the insecurity from our lives. Many people do not have a good strategy and plan of execution in spite of having money, due to which they go bankrupt.

If you too are looking for the best investment options in India, then you have landed on the perfect post. In today’s post, we will tell you about the 8 best investment options in India. All the below mentioned methods are Authentic and Reliable.

 1. Public provident fund (PPF)

Any citizen can invest in PPF, a citizen can open a single account. You can open a PPF account at any post office, government bank, and some big private banks for just Rs 100, in which you can deposit from ₹500 to ₹1.5 lakh annually.

The best thing in this is that it is kept in the E-E-E category i.e. investment, interest, and amount are tax-exempted. There is also an exemption on investment under section 80C of income tax.

Why should you invest in PPF?

Investment in it is completely safe because the government takes its guarantee. There is no tax until maturity by investing in it.  You can invest in it on an annual basis or on a monthly basis.

If you have drowned in debt, then the bank cannot attach the PPF account to recover its debt, even the court cannot order it. You can also take a loan on PPF

Demerits of PPF Investments:

  • The lock-in period is said to be 15 years compared to the new savings schemes, while the maturity of schemes like ELSS is only 3 years, which makes it extremely attractive.
  • The maximum return on PPF remains close to 8 percent, as it is not market-linked, whereas schemes like ELSS are market-linked, so their returns range from 12 to 18 percent as well.

2.Mutual funds

Mutual funds are a means of investment in which all investors invest money together to get returns. This money increases over time. A fund manager manages the money raised from investors. The fund manager is an investment professional.

This money is invested in various securities such as bonds, shares, gold, and other assets. Any benefit or profit from this investment is shared among the investors according to the ratio of their contribution to the fund.

Benefits of mutual funds

  • Anyone can invest mutual fund while you can start investing from Rs 500 also.
  • Lot of segments are available to invest in mutual funds.
  • There is a good professional and experienced staff in the mutual fund to invest your money in the stock market, so that you can remain relaxed and get expected profit.
  • By investing in a mutual fund, your money got invested in different places.
  • Mutual funds are guaranteed good returns compared to direct investment in the stock market.
  • You can invest in mutual funds with less money, apart from this, there is also SIP service of the month.
  • There are mutual funds in which you can withdraw money whenever you want, so that you do not have to invest for a long time like fixed deposits.
De-Merits of mutual fund:
  • Returns on mutual funds are not guaranteed. This is because each instrument that forms part of the portfolio carries a certain element of risk.
  • It is subject to market risks so one must carefully read all the t&c to counter fraud.
best investment plan
best investment plan

3. Fixed deposit (FD)

FD gets almost double the interest as compared to a savings account. Because of this, it is a great option for both short and long term investors.

The Fixed Deposit (FD) scheme of banks is the most popular way of earning interest in our country. FD can be done for a period of seven days to ten years.

FD gets almost double the interest as compared to a savings account. Because of this, it is a great option for both short and long term investors.

The popularity of FD has increased in the last few years. Because more people are investing in FDs because of capital security and fixed returns. Every bank provides FD facility. Many non-banking financial companies (NBFCs) also offer fixed deposits to customers.

NBFCs pay more interest on FD to customers than banks. However, his FD is considered relatively less secure. Bank FDs are considered more secure.

Benefits of FD

  • When a person makes a fixed deposit in a bank or post office, then this investment is completely risk free.
  • This investment is not linked in any way. After the completion of the fixed deposit period, the investor gets the entire amount back with interest.
  • The interest rate in fixed deposits is slightly higher for senior citizens.
  • Banks also review it from time to time and decide the rate of fixed deposits according to the market.
  • There is a slight difference in the rate of fixed deposits of all banks.

Drawbacks of FD

  • The return on bank FD is taxable. Generally, long term investment is tax free.
  • Interest on bank FD is taxable only in the existing slab. In this case, the net return is further reduced.
  • The decrease in net earnings due to lower return on inflation and tax on returns also are two reasons that banks do not make risk-free investments like FD.

4. Investments in Bonds

A bond is like a fixed income in which the investor gives a fixed loan to a company or government, in which the interest rate is fixed or can be changed based on a fixed formula. Just as you buy shares and take a stake in any company, in the same way, by buying bonds, you lend to the seller of the bond, in return he gives you a fixed interest. It is generally of two types;

Main market

In the main market, if one need to borrow money, they invite the general public or investment banks to buy their bonds. In this, bonds are issued for a fixed tenure at a predetermined rate of interest.

Pro market

In the pro market, investors who had previously bought bonds in the main market sell their bonds to other investors. Many broker supporters work in the market which facilitates this type of transaction.

Benefits of Bonds

  • A bond is a debt security under which the bond holder gives a loan to the issuer and is also obliged to repay the principal before the due date after repaying the interest of the bond based on the terms of the bond.
  • Bonds are generally liquid in that it is often very easy for any entity to sell bonds without affecting the price.
  • Bonds are also of many types as per different choice of investors.

Drawbacks of bonds

  • Usually, the market value of bonds decreases as interest rates rise.
  • If the company is declared insolvent or bankrupt, the bond holders of that company may have to lose all their money because there is no guarantee of how much money is left to the bond holders.
  • Bonds are subject to some sort of risks, so one must read all t&c documents carefully.

5. Recurring Deposit (RD)

RD is a good option for those who want assured returns and cannot take any risk at all.

Recurring deposits (RDs) are a popular method of saving among investors. It is considered a good alternative to fixed deposits and long-term post office schemes. In a recurring deposit, one has to deposit a fixed amount every month for a fixed period.

How is RD helpful?

RD is helpful when one does not have a lump sum to save for short-term goals. The reason is that it helps in saving some amount every month.

6. Liquid mutual fund

Liquid funds fall into the debt category of mutual funds. These schemes invest in very short-term market instruments. These include treasury bills, government securities and call money. Liquid funds offer slightly higher returns than a savings bank account.

There is also no problem of liquidity in them. That is, you can withdraw money whenever you want. This is the reason that their popularity among investors is increasing. Within a day of applying, you are eligible to withdraw money whenever you needed.

Financial planners suggest that investors should keep money in liquid funds for short-term goals. This short duration can be from one day to six months.

Liquid funds have the lowest risk. Not only this, they have the lowest volatility in all categories of mutual funds.

7. Gold investment

Investors often take into consideration aspects such as security, liquidity and returns while investing. Investing in gold provides you with security and liquidity. It always gives better returns to the investors. Let us look at some reasons and try to understand why investing in gold is beneficial –

Protected property

Gold can be preserved as a physical property and can be given from one generation to another. Also, gold is in tangible form, so there is less risk.

Liquid assets

You can easily convert your gold into cash whenever needed. There is no paperwork or any intermediary required.

Investing in gold helps you avoid financial crisis. The price of gold is opposite to the equity market. It has often been observed that investment on gold performs well when the stock market falls.

If you have invested in gold, you do not have to worry about inflation, because the prices of gold have been continuously increasing for the last few years.

8. Unit linked insurance plan ( ULIP)

ULIP has a full form of Unit linked insurance plan. By purchasing this plan, you can make the investment like mutual fund and your insurance cover the purpose. Half of this is divided into investment and insurance cover. So that you can fulfill your long-term investment objective.

Benefits of ULIP

  • You get tax rebate according to Section 80c on the premium amount that you pay in ULIP plan.
  • You do not have to pay tax here for the time of return beyond the amount you get.
  • Ulip investments also comes with benefit of Section 10[10(D)].
  • You can invest in such a plan for the education or marriage of children, you can call it a long-term objective.
  • Apart from this, you can also do economic planning for the future.

 

Do not just read this post, but consider all the things mentioned in this post and plan your investment. In today’s time, everyone is thinking of saving money so that they do not face any difficulty in their future time. Saving bucks is a huge art that is not known to everyone.

All the aforementioned paths are absolutely Authentic and Genuine. If you are also looking for the best investment options in India, then you can choose according to your convenience from the method mentioned above.

Before investing in any place, it is necessary to have a good knowledge of it and this is a era of fraud, so you need to be more careful.

THANK YOU FOR READING>>Best Investment Options in India

About the Cashnomic author

Rishabh Shrivastava is a Banker by profession and a tech graduate with a couple of years in Banking and he also holds a good knowledge of investments.

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