Here’s Your 5 Minutes Guide to Choosing the Best Investment Plan in India
Gone are the days when the trusted fixed deposit was the only way for the average Indian to invest their money. Today, we have a variety of options that can help us multiply our money. With inflation and a rise in the standard of living comes a more expensive future.
Investment plans offer much-needed financial security. Whether you are saving up for a house, a vehicle, education, or just want some money set aside for your retirement, an investment plan helps you not only save but also grow your money. If you are thinking of buying the best investment plan in India, then this quick guide is for you.
What is an investment?
Investment is typically a financial asset that helps you grow your money. The resulting funds are accrued to you on a future date and can be used to tide over both expected and unexpected financial obligations. For instance, you may want to set aside some money for your children’s education. To do this, you may invest in a fund that matures 5-10 years into the future.
There are two ways an investment can help you earn a profit. One, if it is a saleable asset, then you can earn an income through a profit when you dispose of it. Two, you can gain as the investment appreciates and may even have an interest component to it. Either way, a good investment helps you put your savings into assets that give you a greater return than the initial value. Look for the best investment plan that is tailored to your needs.
What are the different investments available?
Today, we have a wide variety of investment options available, from low to high risk and based on the purpose of the investment. Now that we have the investment meaning out of the way, let’s take a look at some of the best investment plans in India:
- Investing your money in equity markets or stock is a great way to make a profit.
- Stocks are usually for investors looking for high risk.
- They provide inflation-adjusted returns and offer higher profit, especially over the long term.
- One of the best investment plans in India, it offers an interest value in addition to the principal amount. The investor lends money to the issuer of the bond in exchange for a bond.
- One of the best options for investors looking for low-risk options.
- Offers both fixed and variable interest (known as a coupon) and has a fixed maturity date.
3. Real Estate
- Investors can buy residential and commercial properties and then sell them when the value appreciates over time.
- The risk appetite for such investments depends on the market but it usually takes a long time before it gives a good return.
- In a good property market, the investment can lead to a large profit and can even give you regular returns in the form of rent.
4. Fixed Deposits (FD)
- Offered by banks and non-banking financial organizations, they are one of the best investment plans in India. You place the amount in an FD with the financial institution to earn an interest amount.
- This is the best option for people who want to avoid all risks.
- The returns are almost assured unless in the case of the rare event that the bank fails.
5. Mutual Funds
- These are market-linked instruments and include a mix of both equity and debt instruments.
- The mutual fund mix can be tailored between equity and debt according to your risk appetite.
- MFs are also great for investors that are looking to invest a small amount through a Systematic Investment Plan (SIP) and even offer tax benefits.
6. Public Provident Fund (PPF)
- This is an investment option backed by the government, you can invest in a PPF by simply opening an account with the bank or your nearest post office.
- Perfect for risk-averse investors.
- Has a low minimum investment, as low as Rs. 100 and even comes with tax benefits.
Insurance as an investment
Insurance is also a great way to invest, save, and plan for your family’s future. Some investment plans like Unit Linked Insurance Plans (ULIP) combine market-linked securities with insurance.
While it is not exactly an investment as it does not give you a profit, it does help in ensuring that you have financial stability. In a way, it is like investing in your future so that you can meet expenses and your family is safe even after you are gone.
Plan for Your Future
Investing in our future has become a must-do for everyone irrespective of their age and life stage. It helps you create a strategy to meet your financial goals. An investment plan is a detailed roadmap of how much you need to invest and where to arrive at the amount you are targeting. Sometimes, even if you don’t have an amount in mind, you might want to put your savings to good use by investing them in financial assets.
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