Top 10 Investment Options To Invest Your Money in India

Last Updated on 23/02/2019 by Deepak Singla

In India, investors always on the lookout for the top investment options where they can get high returns as fast as possible with minimum risk of losing the principal amount. We may not say that loud but truth is, this is what we mostly dreamed of. But, the reality is there is no investment option in this world where you could just simply remove the risk out of an investment plan and there is a direct correlation between risk and return.

There are many different types of investment options available out there. All of these options are great in their own ways. One has to understand the nature of returns and risks only. Besides, a person cannot be proficient in all segments. For instance, if one is proficient in intraday trading it doesn’t mean he/she will also good at real-estate investment too. So, if you plan to invest in then be sure to go through all the investment options to match your return-risk profile. Here, we have some investment options you must go through.

Top 10 Investment Options To Invest Your Money In

Let’s take a look at the top investment options in India to invest our money in.

Direct Stock Investment

If you are good at investing money and hold the knowledge of the stocks market then why don’t you invest directly in stocks? Direct stocks investment is a viable option to make good returns fast. It has seen that over long periods equity has been able to deliver high inflation-adjusted returns in no time. But, don’t forget that high profits come with higher risks. Also, it is a very volatile market. There is no guarantee of returns.

Besides, the prices of shares can be seriously influenced by the major and minor announcements, events, and performance. If you are planning to invest in direct equity then you need some serious skills to understand and time the market. So, if you have good risk tolerance then you can go for direct stocks investment otherwise it is not your cup of tea.

Equity Mutual Funds

Investors who feared to invest in direct equities can opt for equity mutual funds as an investment to invest their money in. Instead of a single stock, you will be buying a bucket of stocks called portfolio. The good thing is if you are not from financial background or do not hold any information on investment, even then equity mutual funds is a great way to invest in stocks to get average returns.

In fact, the volatility is also quite less in equity mutual funds in comparison of direct stock investments. But, it doesn’t mean it is entirely risk-free. It is ideal for investors who have low-risk tolerance.

Note: Accordingly to SEBI (Securities & Exchange Board of India) regulations, A MF scheme must invest at least 65% of its assets.

Debt Mutual Funds

Debt mutual funds are also the type of mutual funds where an investor can invest in debt or financial securities such as corporate bonds, government bills, treasury bills, and money market funds etc. Debt mutual funds benefit investors by giving a fixed maturity period and rate of interest to receive a steady return over time. It is best suited for investors who have a low tolerance for risk and planning to create wealth over time.

Fixed Deposits (FDs)

Stating the obvious but fixed deposits is one of the most traditional investment options in India which widely recognized for its fixed tenure and average interest rates. It is to note that not all of us are experts in finance. Many investors don’t have skills, knowledge, and time. Thus, they choose investment options which required minimal attention and can give average returns without the loss of capital.

Market fluctuation doesn’t influence the fixed deposits. In India, the FD user has a certain benefit of a loan of up to 90 percent of the total FD value. Non-FD users generally pay high interest for personal loans but in the FD users can avail low-interest personal loans with ease.

National Pension System (NPS)

Just like a balanced mutual fund scheme, national pension system (NPS) is a pension scheme launched by the Government of India and managed by the PFRDA (Pension Fund Regulatory and Development Authority). This long-term retirement program is an investment product of fixed deposits, liquid funds, equity, government funds, and corporate bonds among others.

Public Provident Fund (PF)

Provident Fund is a fully-backed government scheme which not only offers an attractive interest rate but also fully exempted from the tax. Public Provident fund is trusted by many Indians to invest safely in a provident fund scheme.

Senior Citizens’ Saving Scheme (SCSS)

Although the scheme is specifically for senior citizens and early retirees the scheme provides better interest rates than the fixed deposits’ rates of 8.3 percent per annum payable quarterly and fully taxable. Anyone above 60 can avail this investment option from the post-office or a bank. The Senior Citizen’s Saving Scheme has a 5-year tenure which can be further extended to three years after scheme’s maturity.

RBI Saving Taxable Bonds

Many conservative investors who don’t want to get caught in market fluctuation prefer to invest in RBI’s saving taxable bonds. With these bonds, one can lock the returns in bonds till maturity. While investing in RBI saving taxable bond, a Certificate of Holding has provided to the investor as an investment proof.

Real Estate

Real estate is a very common asset class in India where many Indians choose to invest in real estate for capital appreciation, general income, and personal use etc. In doing so, they hold on the real estate property in believing, one day it will give them good returns while selling the property at a higher price. However, investing in real estate needs some serious commitment and can turn out to be a good alternative for equity and mutual funds in terms of long-term investments. Unfortunately, real estate is not as liquid as the other asset class which you can sell at the time of urgency.

Gold

There was a time when “gold” was one of the most useful asset class to invest in. In fact, it shows the status of an individual. “Gold” has been in trading like forever. But, nowadays when there are other viable investment options available, it is not smart to invest in gold. Besides, the making charges cost around 6-14 percent of the cost of the gold which may limit your returns.

Conclusion

Overall, we can say that there are two kinds of investment options – fixed and market-linked. The fixed income investment options like provident fund and fixed deposits help in preserving capital as a long-term investment where one can have average returns with minimal or no risk at all. However, the market-linked investments are suitable for investors who have high-risk of tolerance and want to outperform the market to get high-returns in short period of time.

So, it is to up to you! You need to figure out what kind of investor you are – Conservative or High-risk tolerance?