Last Updated on 03/01/2024 by Deepak Singla
No doubt, the best way to financially secure one needs to do the investments to seek financial stability in the future. Generally, people say, if you want more money then you need to work hard. But, we’re not talking about earnings but the savings for the better future. Investment is not about work for money but makes your money work for you. We may not use to say that in loud but most of us desire to double our money overnight with less or no risk at all. It is a good dream, right? – But, trust me, it is nothing but ‘fantasizing about getting rich in overnight’. The only possible way is to find an investment option that can really maximize your earning potential.
Let’s dig deep and learn more about the available best investment options in India to this date.
Top 10 Investment Options in India in 2024
Here we’ve included two types of investment options which are currently available in the Indian market –
1.) Investment options that offer returns on the basis of market performance
2.) Investment options that offer annuity payouts on maturity dates.
But, before you sink yourself in it we would recommend you to understand the fact that each investment avenue or option is unique and best in its own way, and varied with their own nature of returns and risks. So, when deciding on the investment option, it would be wise to be thorough and choose the one that matches your risk tolerance and financial goals.
1. Public Provident Fund (aka PF)
PPF is the one most reliable and safest investment option that you can look forward to doing long-term investments to receive tax-exempted returns. The interesting one receives on public provident funds is compound.
All one has to do is to open a PF account in a post office or bank where your capital will get locked for 15 years with the extension of five more years. The only drawback is you can’t withdraw your investment money before six years in the case you need the money, you can take the loan from the bank on the basis of your balance in your PF account instead.
2. Direct Equity Investment
As the name interprets ‘direct equity’ means investing directly in the equity market. It is a high-volatile class of assets that won’t guarantee returns but if someone from the financial background holds the knowledge of investing in the stock market can take advantage of investing in direct equities to make good returns – better than mutual funds and fixed deposit schemes, etc.
But, for a beginner, it is not the right investment option since one needs to be proficient in picking the right stocks for investment and timing the entry and exit positions among others. Furthermore, you need to efficient in performing technical and fundamental analysis of a stock. But, no doubt, if invest smartly, the investment avenue can give you inflation-adjusted returns.
3. Equity Mutual Funds
Mutual funds are quite popular in the investing world and whether you believe it or not but one of the best investment options to this date. And equity mutual funds are funds that principally invest in stocks only. Generally, the equity mutual fund schemes are classified as per the market-capitalization and sectors. The equity mutual funds are less volatile than direct equities but comparatively high to FDs and PPF schemes.
Investors with average risk-tolerance can benefit from investing in the equity mutual funds to get potential returns. When investing in equity mutual funds, one doesn’t need to be bound to the maturity date and can withdraw the money from investments when needed. Another advantage of equity mutual funds is, “you won’t be investing in a single stock but a group of stocks known as a portfolio.”
4. Debt Mutual Funds
If you’re not planning to invest in equity mutual funds then you can go debt mutual funds which only pool your money in debt securities such as treasury bills, government bonds, money market securities, and government securities. Debt the fund is an ideal choice for investors who have less risk-tolerance and looking for a steady source of income.
5. Fixed Deposits (FDs)
There are two different types of fixed deposits available in the Indian market:
- Bank Fixed Deposits – Bank fixed deposits are one traditional investment avenue with fixed tenure but the average interest rates. Bank fixed deposits do not influence the market performance and offer an add-on benefit of loan on the basis of fixed deposit.
- Company Fixed Deposits – On the other hand, the company fixed deposits are no different than bank fixed deposits except the returns in company FDs are quite higher. Also, like traditional Bank FDs, you won’t be able to withdraw money before maturity. The only good side of company FDs is the higher interest rates otherwise neither these are as secure as bank FDs nor controlled by the Reserve Bank of India (RBI). But, if you desire high interests with least risk then company FDs might be right for you.
6. Real Estate Investment
Real-estate is very popular and common investment option in India which is considered very safe. However, to invest in real estate, it is very important to be patient and show some serious commitment towards the real-estate investment. The risk is minimal in investing real estate investment since the value of a property will surely increase with time but it is a highly illiquid asset class which made it difficult to sell the asset when money is needed on immediate basis.
Anyways, it can be a good alternative of direct equity investments and less-risky if we’re talking about long-term investments.
7. Gold Investment
Gold is one of the oldest investment options in India. It is way older than you could ever imagine. In fact, there was a time even now, when the possession of gold shows the status symbol of that individual. But, it is not wise to invest in gold jewelry since there are making charges and other charges but invest in different gold schemes such as Gold ETFs, Gold mutual funds, or even in the commodity market.
One can invest in the gold asset class for both a short-term and long-term basis.
8. National Pension System (NPS)
NPS is a long-term retirement pension scheme launched by the Government of India and managed by the PFRDA (Pension Fund Regulatory and Development Authority). The pension scheme is a mixture of equities, liquid funds, fixed deposits, government bonds, and corporate bonds that give the edge to investors to secure the capital in making potential returns with as minimal risk as possible.
9. Unit Linked Insurance Plans (ULIP)
ULIP is an investment option that allows you to invest in both equities and bonds, along with the protection via insurance at the same time. When invested in ULIP, a part of your premium goes to the equities and bonds and rest is paid to the life insurance cover.
The advantage of ULIP is to have an investment option that won’t only give potential returns in the future but life cover insurance in case of an emergency.
10. RBI Saving Taxable Bonds
If you are very conservative towards taking risks in investing money then you can opt for the RBI saving taxable bonds to invest your money for a fixed maturity date where the bond will be issued in a demat form and credited to the BLA (Bond Ledger Account) of yours. And as a proof the certificate of holding provided to the investor in RBI saving taxable bond.
Hope, the information we’ve provided on ‘Top 10 Investment Options in India’ will help you in picking the right investment avenue to invest your hard-earned money. Nevertheless, if you have any query or would like to add something up here then doesn’t forget to mention in the comment section below.