Best Investment Options In India

Wondering about the best investment options in India? Well, there are plenty of solid investment options, depending upon your financial objectives, current financial situation, preferred duration, and appetite for risks. However, while there is nothing called as the best investment, you should certainly take a look at some of the popular picks amongst investors in the country. 

Best investment plan in India- Taking a closer look at the top options 

When it comes to investing for future gains, there are quite a few options that are worth considering in India. Here’s taking a brief look at the same: 

Mutual Funds- It’s certainly true that Mutual fund investments are always subject to market risks, but it’s also true that they are considered as one of the best investment avenues for growing wealth and diversifying your portfolio. These are one of the most coveted investment channels in India. Equity mutual funds are the most popular type that people prefer as per reports. Some of the country’s highest-performing mutual funds have ensured CAGR (cumulative average growth returns) or even a whopping 20% over 10-12 years on average. 

There are various types of funds available and you can start small by investing Rs. 500 or Rs. 1,000 every month if you wish. These are safer investments in that respect, i.e. you spread out your risks. Professional advice is required before venturing into mutual fund investments.

NPS- This is one of the safe investment options in India. The National Pension Scheme is ideal for people who have a lower appetite for taking risks since this is Government-backed. You will be getting a specific amount as your pension from this scheme while being eligible for tax benefits under Section 80CCD (1B) over and above deductions under Sections 80C, 80CCD, and 80CC up to Rs. 1.5 lakh annually. NPS investments help you get an extra deduction up to Rs. 50,000 annually.  

PPF- Another safe option for investment, PPF, or the public provident fund, is a great investment option for saving taxes up to Rs. 1.5 lakh under Section 80C. It also guarantees steady returns over a sustained time period. PPF accounts can be opened at the post office or bank and they have durations of 15 years. You can extend the tenor by an additional 5 years. You can get loans on your PPF account if required and withdraw early after the 7th year of setting up the account. The interest that you earn is completely free from taxation. 

Stock Market- Investing in the stock market is another preferred option for many people. There are people who invest in mid/large/small-cap stocks for their portfolio in order to diversify risks and earn steady returns. Along with earnings from stock trading, you can also earn via dividends. The risk component is higher, but you have full control over your investment. 

FDs- Fixed deposits have long been the preferred investment choice for a majority of the Indian working population. A safe and secure investment, bank FDs come with depositor insurance up to Rs. 5 lakhs as per DICGC (deposit insurance and credit guarantee corporation) regulations. This has been made effective from the 4th of February, 2020 and covers both principal and interest amounts. You can choose half-yearly, monthly, yearly, or quarterly cumulative interest for your FD. The interest will be added to your income and taxed as per your IT (income tax) slab. 

SCSS- The Senior Citizen’s Saving Scheme is a great option for accumulating funds for retirement. Senior citizens or retirees can avail of this investment option from their post office or bank. People above 60 years of age can invest in SCSS which comes with a tenor of 5 years. This can be extended by another 3 years upon maturity. The maximum investment amount is capped at Rs. 15 lakh and more than one account can be opened as well. The rate of interest is payable on a quarterly basis and is also taxable. Upon making the investment, the interest rate will remain fixed until maturity. Senior citizens can get deductions up to Rs. 50,000 annually under Section 80TTB on the interest that they earn from this scheme. 

These are some of the popular investment options in India for people across age groups, income categories and risk profiles in India. Many of these schemes are time-tested and safe options for investing your money, namely PPF, FDs, and NPS while the SCSS is a great option for post-retirement investments. At the same time, mutual funds have now emerged as the top pick for people at various stages in their careers. Not only do they help people invest in achieving specific financial goals over a sustained time period, they often ensure returns that are superior to inflation and help in spreading risks through investing in a mix of market instruments. 

On a closing note

You should aim for a balanced portfolio comprising of mutual funds, stock market investments (if you have accounted for the risk and have expert professionals guiding you), and other investments as well such as gold and real estate while building up your retirement corpus through instruments like PPF, NPS, and bank FDs. 

This could be a prudent strategy since the age-old proverb has always proved true, time and again- Do not keep all your eggs in one basket. Spread out and de-risk your financial portfolio while exploring newer options at the same time. Investing your money wisely is a prerequisite for seamless wealth creation.