When it comes to investment choices in India, there are ample options. Some are low risk-less return, while some follow the model of high risk-more return. So, which one to pick?
Here are six of the current best investment options that you can consider investing in:
1. Digital Savings Account
A savings account is one of the most preferred investment options if you are looking for an investment plan for the next five years. These accounts offer maximum liquidity, meaning you can withdraw your funds anytime without hassles or penalties for early withdrawal.
Today, there are several ways in which one can open a savings account. As technology has advanced, you can now digitalise the entire process of opening an account with the help of a digital savings account app! From opening an account to withdrawing money, everything can happen digitally!
2. Mutual Funds
Another prominent investment option in India is mutual funds. These are ideal for long-term purposes as they provide high returns. Although the risk quotient in mutual funds is high, it is still considered one of the best savings plans compared to other market-linked investments.
There are two types of mutual funds:
- Equity Mutual Funds: These market-linked securities are one of India’s most famous investment choices. They offer better returns than other investment options like fixed deposits or debt funds. However, they are volatile and hold higher risks.
- Debt Mutual Funds: Debt mutual funds are best for people who want to gain stability in their financial portfolio and are looking to invest in a less risky or volatile investment market.
3. Fixed Deposits
Fixed deposits stay true to their name. They offer fixed returns on the set investment tenure. These returns are paid on a monthly, quarterly, or yearly basis. Fixed deposits have a range of tenures, from a minimum of seven days to a maximum of ten years.
Investing in fixed deposits offers financial stability and is considered a safe instrument of investment for the long run!
Although they are one of the safer options for investment, there’s one drawback. FDs are not flexible. This means that you cannot withdraw your savings before the tenure, and if you do, you are faced with penalties.
4. National Pension Scheme (NPS)
This government-backed investment scheme is one of the best pension solutions in India. You can invest in government securities, bonds, and other equities per your preference.
If you are looking forward to investing in an NPS, you can go for two options – auto and active. You can invest funds in different assets automatically in the auto investment option. While in the active option, investors can invest in assets as per their choice.
This pension scheme will mature only after the investor turns 60. The interest is tax-free, meaning you can withdraw lump-sum payments tax-free upon maturity. However, the amount will be taxable as your regular income if you want to receive the pension post maturity.
5. Real Estate Investment
Scrolling through the best investment options and not coming across real estate is impossible! The real estate sector is India’s fastest-growing industry. It holds different aspects like housing, commercial, manufacturing, retail, hospitality, and more.
Housing is known to be the best real estate investment option in India. Since the property rate increases every six months, the risk is very low. Hence, real estate is the gem of investment plans if you search for a long-term investment with high returns!
6. Initial Public Offerings
When a new company invites the public to buy its shares before getting listed on exchanges, it is known as an initial public offering. The rates are low during the start. Once they get listed on the stock exchange, their stock prices change, depending heavily on the market conditions, company performance, and management.
If you have your eyes set on the right company, an initial public offering is considered a low-risk and long-term investment plan!
Which One to Choose?
The above list combines both market-linked and fixed-income investment options. We all invest with the mindset of having earnings for the future. So, picking the right choice entirely depends on you!
Investing in market-linked choices is perfect if you are willing to take the risk and be vulnerable to volatility. And if you want to keep everything under control, take fewer risks, and maintain a stable portfolio, fixed income investments are for you.
Whatever you choose to go for, remember investments are risky – no matter how low the risk is. So, do your research, weigh your options, and go with the ones that align with your goals!
Naina Rajgopalan has a thing for numbers and a deep fascination to learn about all things finance. She’s been money-wise from a young age and has always shared her knowledge and tips with those around her. Being a part of the content team at Freo Save, a digital savings account app that offers a 7% interest rate on savings along with benefits such as insurance on balance, safe & secure banking, and so on, Naina stays updated with the latest of what happens in the banking and fintech industries. She has taken upon herself to share her knowledge with readers across all walks of life to help them manage their finances and budgets better, so they can make better decisions while spending, borrowing, investing and saving.