The best investment options in India
It is that time of the year when people vow to spend less and invest more. Yes, Union Budget 2017–18 is coming up. Investors are hoping for a lot of incentives on investments and insurance products. Do you want to maximise your earning potential? Here are the best investment options in India right now.
Public Provident Fund (PPF) is one of the best investment options. There are several reasons for this. First, it is a government-backed scheme. So, it guarantees safety and security. It also offers attractive interest rates. The returns are tax-free. In a financial year, you can invest anything between Rs 500 and Rs 1.5 lakh in PPF. You can also enjoy other facilities like loans and extension of account.
Equity offers some of the best returns to investors. The returns range between 13% and 15% per annum. But, make sure you have sound knowledge of the stock market before you invest in it. Equity-linked investments involve high risk. A good way to mitigate this risk is to adopt a long-term investment strategy.
- Mutual funds
Do you want to earn good returns without facing the risk of the stock market? Mutual funds may be the best option for you. There are different kinds of funds. These are debt funds, equity funds, hybrid funds, and so on. They cater to the different goals of an investor. Invest in mutual funds through a systematic investment plan (SIP). This is one of the best ways to earn consistent returns over a long period.
Are stocks or mutual funds not your cup of tea? Then how about bonds? These are a very good investment avenue for those interested in earning good returns at a low risk. Many bonds offer a high rate of returns to investors. Bonds are a predictable income stream. They also act as a great savings vehicle when you do not want to put your money in risk.
Fixed deposits (FDs) are quite popular among investors in India. An FD account is a type of savings account. A customer deposits money in it for a specific period. At the end of it, he or she earns a fixed rate of interest on the investment. Compared with some other options, like stocks, FDs are a safe investment avenue. They also offer relatively high rates of interest. That is a winning combination.
- Real estate investment
There has been a recent slowdown in this sector, thanks to demonetisation. But real estate is among the fastest-growing markets in the country. Most Indians traditionally invest in real estate because it is tangible. It is also a more or less safe investment option. There are other ways to invest in real estate too. These include sectors such as housing, commercial buildings, hospitality, and manufacturing.
Gold is another traditional investment avenue in India. Almost every household in the country stores gold in some form. Apart from direct ownership, there are many ways for a person to consider investing in gold. Gold mutual funds, gold deposit schemes, and gold exchange traded funds (ETFs) are some good options. For example, you can trade in gold ETFs just like you trade on the stock exchange.
Do you dream of making pots of money from your investments? Try to get in on an initial public offering (IPO) of a company. Then, wait for the share price to rise. In the last five years, some companies listed on the Indian stock market have risen by 500–1,000% of the issue price. But conduct a detailed study of the company and the industry first. Of course, with demand for these skyrocketing in recent times, you may not get even a single lot.
- Unit-linked insurance plans (ULIPs)
ULIPs offer investors the twin benefits of life insurance and market returns. These invest in debt and equity markets. The investors then earn returns. The debt or equity allocation may differ among insurance companies. Investors can choose an option based on their risk profile.
There are many choices for investors in India. Choosing the right avenue to increase your wealth may be a little confusing. The above list gives some of the best options available to you at the moment.