5 Best Investment Options In India
This post was last updated on August 19th, 2019
In today’s world where every individual not only works to make ends meet but also to financially secure the unforeseen future, it becomes crucial to keep a track of the inflows and outflows of income. One of the highly prioritised goals that everyone cherishes is ensuring that financial crunches don’t form a part in their later life.
In fact, it is during 30s when you have stable earning source that you need to have a staunch financial plan activated so that you have your money invested in profitable instruments that guarantee decent returns periodically. Making investments not only qualifies you for tax benefits but secures your future even against unforeseen circumstances.
Unless you want to gamble online, there are several financial institutions in the market who offer incredible investment options and lack of knowledge on how these investment instruments work, can create ambiguity in the minds of prospective investors. Individual’s risk profile and several other determinants impact the choice of investment plans and here are 5 best investment options that will help you smartly manage your financial future and put your savings to work:
1. Mutual Funds
One of the best investment options in the country is mutual funds, of which, equity mutual funds are extremely popular. As a matter of fact, the potential of the equity mutual funds is so humongous that some of the extraordinary performing funds have produced cumulative average growth returns of around 20 percent in just 10 years time.
But high returns are often accompanied with high level of risk. This is where you would require the expertise of financial advisors. While there are several kinds of portfolios and investment options, the mutual funds deliver best performance in generating reasonably high returns.
Choice has to be made between mutual funds having large cap, midcap, small cap and diversified caps. Mutual funds are considered to be one of the smartest ways to build huge wealth in the long term. You can choose to either invest a lump-sum amount or opt for SIP (Systematic Investment Plan) and start investing even as little amount as Rs. 500 per month.
2. Real Estate
For this having idle money, you can put them in real estate, which is assumed to be a profitable investment in the long run. Since the inception of the Real Estate Regulation and Development Act (RERA) in 2016, the real estate market witnessed a catapult and is a well regulated and secured industry for both buyers and sellers.
With the growing urbanisation, the demand for real estate is increasing significantly. Moreover, the ease in availability of home loans has improved the affordability factor allowing buyers to get further benefit in income tax until the payment of home loan.
3. Stock Market
Stocks are perhaps one of the simplest and best investment options in India as their performance can be monitored in real time. For investors without huge amount of funds can still invest in small, mid and large cap stocks and even smartly invest in all of them by maintaining a balanced portfolio. Your portfolio can be adjusted based on your risk taking capacity.
Before selecting a stock, you should ensure that the company has good corporate governance and returns are consistent. Investment should be done in stocks of those companies who carry easily comprehensible business model and have a track record of stable and growing earnings.
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4. Public Provident Fund
In case you are unwilling to take risks while investing your hard earned money then Public Provident Fund (PPF) is for you. Since it is less risky and is great way to get decent returns on investment, it is one of the best options for the common man.
This fund has similarities with the Recurring Deposit and a PPF account can be opened in a bank or at post office with tenure of 15 years that can be extended to further 5 years. You can even avail a loan on your PPF and even apply for early withdrawal after 7 years of opening the account. Moreover, the interest on the PPF account is tax free.
5. ULIP (Unit Linked Insurance Plan)
The ULIP (Unit Linked Insurance Plan) is becoming extremely popular especially with young people. The ULIPs offers investments in equities and bonds in addition to security through insurance. In this kind of plan, a portion of your premium gets invested in the chosen stocks and bonds and the rest is paid towards life insurance cover.
Like most investment options, it involves some risk and the fluctuations in case of ULIPs are measured in terms of Net Asset Value (NAV). ULIPs come with lock-in period of generally 5 years, thus inducing the habit of disciplined investing. Because of its equity advantage, ULIPs have the potential of garnering better returns than most insuring products. ULIPs are extremely flexible as it comes with the option of switching between funds during the term.
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Snehashree Bhat
A young writer who loves to pen words from creative perspective. Passionate internet surfer, a versatile homemaker and a person who finds pleasure in adopting healthier and positive changes in her persona. An enthusiastic feminist who wishes to make serious changes in the stereotypical thought process of the society via the voice of her words.
