Investing is absolutely necessary for people to enjoy a secured future. Investors have various options to make financial investments. Investments can be Growth Investments that are the preference of long term investors who are able to face market ups and downs. On the other hand, Defensive Investments focus on consistent income than growth. These are lower risk investments as compared to growth investments.
Some of the top investments are listed below here. Let’s elaborate on the best investment plans and see how to invest money so that you can select the right kind of investment for yourself and make the best use of them.
Top 10 Best Investment Plans
1. Equity Stocks
Equity shares offer a part of the ownership of a company. Companies that want to raise funds, divide the total amount that it is planning to raise into small fractions called shares.
Equity investment is for long term horizon i.e. 7 years or more years. Investors must diversify their investments and do not buy shares of just one company with all available funds.
2. Debt Mutual Funds
A debt mutual fund is also known as a fixed-income fund as it is the investment in fixed-income securities such as government securities, bonds, debentures, and other money-market financial instruments.
Know more: Fixed Deposits Instead of Debt Funds
These funds are relatively stable and help to generate wealth. But it is also not a risk-free investment but yes these are considerably less risky. Risks involved are credit risk, liquidity risk, interest rate risk.
3. Investment Plans in Equity Mutual Funds
Equity mutual funds are managed by fund managers who spread your investments across companies in order to provide you great returns by diversification strategy.
Equity funds have the potential of generating better returns than debt mutual funds. These funds are risky because their performance will be affected by several market factors.
4. Company Fixed Deposits
FDs are free from any market fluctuations, so considered the safest option for investment. Company FDs are just like bank FDs but offer more benefits than bank FDs. You will earn higher interest rates on company FDs. Bajaj Finance FD is offering interest rate up to 6.85%. You can avail the option of periodic interest payouts.
You can open and access your FD account online. With Bajaj Finance FD, you will get an additional interest rate benefit of 0.10%, if you invest online. Assured high and guaranteed returns are available with Bajaj Finance FD as it is highly rated for its safety and credibility by ICRA and CRISIL.
There can be liquidity risk and inflation risk associated with FDs. Bajaj Finance waives off the liquidity risk as you can take a loan against FDs up to 75% of the maturity amount.
5. Government Bonds in Investment Plans
Government bonds are debt instruments, where you invest your money with Central and State Governments in different forms like GOI Savings Bond, IRFC Tax-free bonds, Sovereign Gold Bond, and Capital Gains Bonds.
It is like a loan to the government of India and in return, the government offers a high rate of interest to be paid at regular intervals. You can lose money here if you sell bonds before the maturity date. Most bonds are not taxable in the hand of investors.
6. Real Estate Investment
Real estate investments have a high potential to grow if the economic conditions are favourable. It is the location of your property that determines your profits.
7. National Pension System (NPS)
NPS is a pension cum investment long term retirement-focused scheme for Indians and NRIs of 18-65 years to provide security in the old age. It is a mix of FDs, bonds, liquid funds and government funds.
With this scheme of Pension Fund Regulatory and Development Authority (PFRDA), Govt. of India, you will earn a regulated market-based return because it is professionally managed. You can start an NPS account with Rs.1,000.
8. Public Provident Fund (PPF)
PPF is for low-risk investment profiles. It is a long term investment for 15 years starting with a minimum of Rs. 500 and the maximum investment limit is Rs. 1.5 Lakh annually.
The Central Government decides PPF interest rates. You will earn stable returns on your investment annually 7.10%. Only Indian citizens are allowed to open a PPF account. Remember, the interest rate is reviewed every quarter.
9. Pradhan Mantri Vaya Vandana Yojana (PMVVY)
PMVVY is exclusively for sr. citizens aged 60 years and above. They can invest a maximum of Rs 15 lakh for 10 years. It is available till 31st March 2023. Senior citizens will earn an assured return 7.4% annually.
The pension income is payable periodically monthly, quarterly, half-yearly or yearly as per investor’s preference. The maximum amount that you can invest in this scheme is Rs 15 lakhs.
10. Senior Citizens Savings Scheme
Senior Citizens Savings Scheme 2020 is offering a 7.4% interest rate. It has tax-saving benefits and offers a regular source income to senior citizens, so it is preferred in the portfolio of senior citizen investors. They can invest up to Rs 15 lakh, single or jointly, for 5 years and can extend it for further 3 years.
Your investment portfolio will depend on your goals – you want another source of income, want a retirement corpus or just do not want to get into a financial investment to create wealth. Try to have a mix of investments to meet your financial goals as per your risk profile and time horizon.