When it comes to investments, people are confused about choosing the best option as there are a host of them available, and many a times one needs to select the right one that suits their requirements. When it comes to building a secured financial future, it is not always good to rely on savings alone and one has to look out for various other investment options that can give better returns over a period of time.
Opting for some of the top investment options is always a good idea to make your money grow over the years. Generally, when it comes to investments, stocks are the most preferred option for Indian investors who are not aware of other available options floating around the Indian investments market. Here, we throw light on other options like fixed deposits, Unit Linked Insurance Plan (ULIP), Liquid funds, government bonds and many more.
There are various short term, medium term and long term investment options which you can opt for after considering your risk appetite and investment goals. There are many top investment options in India which offer better returns than the traditional fixed deposits. You should always consider diversifying your portfolio for maximizing returns and minimizing risks.
Here are the 10 best investment ideas in India that one can consider for better returns:
1. Fixed Deposits (FD) and Recurring Deposits (RD)
These are the most preferred investment options of Indian investors who want guaranteed returns with minimal risk. Fixed Deposits (FD) and Recurring Deposits (RD) can be easily opened with all banks and Non-Banking Financial Companies (NBFCs) as well as the post office.
2. Mutual Funds
Investment in mutual funds always carry a bit of risk, but if you look at its returns, they are far more better than traditional FD’s. You can create an investment portfolio consisting of mutual funds aiming at short term and long term goals based on your preferences.
If you’re looking at fixed income from mutual funds along with lower risk appetite, systematic investment plans (SIPs) or systematic withdrawal plans are preferable.
3. Stocks
Stocks are the best investment options for long term or short term investments. Direct equity investment is best for the long term.
4. Post Office Saving Schemes
The Indian postal department offers various deposit schemes which are suitable for Indian investors. You can open invest in one by simply visiting your nearest post office. As it is controlled by the government of India, there’s a great amount of security in your investments.
5. Bonds
Companies and government bodies float bonds to raise funds for their development. One important point to be noted here is that bond prices are inversely proportional to the interest rates that are offered. Their prices fall when the interest rates increase and vice versa.
6. Public Provident Fund (PPF)
Public Provident Fund is backed by the government and provides guaranteed returns based on the applicable interest rate. The PPF interest rate in decided by the Government and is bound to change every quarter. The current interest rate from PPF is 7.1% and will be in effect till September 2022.
Although the maturity period of PPF is 15 years, you can start the partial withdrawal of your money after completion of six years. You can calculate PPF returns using the PPF Calculator available on ET Money.
7. National Pension Scheme (NPS)
There are numerous benefits of investing in National Pension Scheme (NPS) as you can invest with amounts starting as low as Rs. 500 a year. There are various options like Equity, Debt, Government Bonds etc., which also offer tax benefits under section 80 CCD (1B) along with partial withdrawal options.
8. Liquid Funds
Liquid funds are similar to stock market investments. Here the money is invested in government bonds and securities with no lock-in period as it allows you to withdraw money during emergencies.
9. ULIP
This is the best investment option if you’re looking at market linked returns along with insurance. A ULIP allows you to buy a life insurance that invests in different funds at the same time, gives life cover too.
10. Senior Citizen Savings Scheme (SCSS)
One of the best investment options which is backed by the Government of India, hence makes it an ideal investment for those looking for safe investments. It is created for investors above the age of 60 years. The maturity of the deposited amount is after five years from the date of account opening.