Indian households are always looking for an optimum investment plan that enables them to grow their savings significantly. However, due to lack of knowledge and unrealistic goals, they end up compromising with a less efficient plan or select the one that is inappropriate.
Well, the need of the best investment plan cannot be overlooked as India is facing an ever-rising inflation, and thus long-term financial goals are looking far-fetched. Therefore, one must look for the best investment plan that supports your financial goals.
If you are looking for the best investment plan in India, then we list the most popular options available to you:
- Bank Fixed Deposits (FDs): The most common and simple product, FDs are a good plan for beginners. Interest rates are higher, especially for public sector banks and are simple to handle. But, early withdrawal has a penalty, and they earn less than corporate deposits.
- Public Provident Fund (PPF): Another traditional method, it is often selected by the salaried class. The return is almost 9%, and it is decent for 30% tax bracket people. The time span is high that is 15 years, and you cannot withdraw before the maturity, but the risk is the lowest. Another variant available is Employee Provident Fund (EPF).
- Mutual funds: It is a safe and healthy investment alternative. These are trusts that are managed by professionals and invest in various asset classes like equity, debt and money market instruments. There is a variety of schemes available, each catering to different objectives. There are funds like Reliance ELSS for saving taxes, and there are diversified funds that offer optimum risk management.
Short-term investors prefer money market funds that earn a return ranging from 5.5 – 9% and, unlike FDs, offer very high liquidity and simplicity.
For long-term investments, they are a good alternative of PPFs. Plans like Systematic Investing Plans (SIPs) and Systematic Withdrawal Plans (SWPs) are very popular and allows investors to explore capital markets and generate a large corpus, in the long run, thus, many prefer them for retirement planning, etc.
- National Savings Certificate (NSC): It is an option that has a time span of 6 years and tags along many government subsidies. One can start from R.s. 100 and interest rate is 8%.
- Gold/commodity investment: Precious commodities like Gold and other valuable objects are very common in India. For beginners, gold and silver investment can confront inflation but only to a certain extent. This is because it does not have much utility. Other options like gold ETFs can be a useful alternative to physical gold investment.
- Tax saver bank deposits: Just like the bank fixed deposits, the tax saver bank deposit is a safe and certain investment. It is a good way to get some tax benefit that can juice up return.
- Monthly Income Scheme: If one is looking for an instrument that can give a monthly income, then Monthly Income Schemes is definitely a god option.
- Savings Account: A reasonable place to keep short-term funds but for a considerable amount of money one would need to consider a FD or some other instrument that can yield higher.
- Fixed Maturity Plans: Contrary to its name, fixed maturity plans have no guarantee or indication of returns. They are very different from the other instruments mentioned here. Fixed maturity plans give FD like returns and some tax advantages too.
These are some of the best investment plans in India explained for beginners. All of them have their own pros and cons choose them based on your suitability. You must be aware of your risk profile, financial goals and investment horizon while considering any plans. Subsequently, you can consult your financial advisor for any clarification and make an informed decision.
Make your wise decision for a sound financial future!
Contributed by https://www.reliancemutual.com