Extra investment to earn more is everyone’s wish. The main focus behind the investment is to earn double the amount speculated. Not every time it depends on luck rather how smartly you choose your path. That is why most of the people go in search of the list of all popular investment options in India. Maybe that is why you too, are reading this article.
However, it’s true to admit that the more you invest, the more you need to think about security. Thus, proper knowledge about the investment option is a must. So, without wasting more time on the introduction, let’s rush towards the list.
List Of Best Investment Options In India
In this article
Best investment schemes are one of the most googled. Everyone yearns for a risk-free high returned scheme. Yet, if one scheme offers a risk-free transaction, there would be less return attached. However, some schemes offer both moderately. You have to choose your priority and set goals. Mentioned below is the list of all popular investment options in India. You may opt for the one that goes by your expectations.
1. Direct Equity
Direct equity is one of the investment with a very high risk. Yet, if your luck favors and you manage things well, you can earn high. Therefore, if you’re ready to accept a loss, then only go for it.
- If managed well, you can expect an average return of at least 18%.
- You can double your amount in about 4 years.
- However, it is of utmost necessity to create a Demat account to proceed with direct equity.
- Under section 80C, it provides a tax-free transaction. However, it’s restricted till Rs. 1 lakh. If the amount exceeds, the tax shall get levied at 10%.
- It is one of the short term investments with a tenure period of 3 years.
- The return rate you can expect on this scheme is more than 15% the amount you invested. Thus if you deposited Rs. 1 lakh, you could expect a minimum return of Rs. 1,15,000. It takes about 4-5 years to double your investment amount.
3. Tax Savings Fixed Deposit
If you want to go for a risk-free, low maintenance, and high return investment, then this is the way. You can find it in any Indian post offices or banks. Various banks provide this scheme as well.
- The rate of interest can range between 6% to 8.5%
- You can expect a minimum return of 7.5% of the total amount you expended.
- However, you can double your amount in about 9.47 years.
- The scheme has a maturity period of up to 5 years. Yet, the interest accrued has tax impositions on it, unlike a few other schemes.
4. Unit Linked Insurance Plans or ULIP
- This scheme provides the benefit of getting exempted from tax. It is, however, applicable only for premium users.
- Returns are, although exempt from the tax impositions, yet, it’s quite variable. It varies depending on the amount deposited. If the amount deposited is more, more gets accrued on it as interest. Another factor on which the return rate depends on is market performance. That is, if the market functions well, demand raises, more is the return rate.
- This plan has a list of charges that you need to pay periodically for the smooth functioning of the insurance policy.
- Apart from everything, make sure that you know where you’re investing based on your needs. Unlike investments, insurances aim at life and the properties mentioned.
5. Debt Mutual Funds
- These schemes offer quite less risk and good returns. As a result of which it is one of the most preferred investment options.
- The lock-in period can be short term as well as medium term. The short term tenure period includes about 3 months to a year. While the medium-term bear a tenure period of about 3-5 years.
- You can expect an average return of at least 8% of the amount invested annually.
- Although the returns are quite good, yet, there’s no guarantee for it. It’s like, you can receive a lump sum or have to deal with the loss. It is because of the swinging interest rate. That is, at times, it may rise while at other times it may fall as well.
6. National Pension System or NPS
Almost all pension investments are long-term speculations. The National Pension System or also known as NPS, is one of them. You need to keep on investing for a long duration of time to get a lump sum at the end.
Major Eligibility Criteria
Indian residents within an age group of 18-65 years of age. Let’s go through its features to make it clear for your understanding-
Tier I and Tier II
The NPS system has two tiers, I and II. In the I tier, there are mentioned rules on the pension plans. Apart from that, it also talks about the guidelines regarding its withdrawal. On the other hand, tier-II has other restrictions. Unlike pension plans, it talks about the mutual fund schemes.
- If you’re thinking about the organizations that handle the funds of this scheme, then, let me tell you it is one of the most trusted schemes. Organizations like SBI, LIC, etc. look after the funding in this scheme.
- The NPS on the other hand, is also known as ‘all-in-one investment’. That is, it includes various types like corporate funds, govt. bonds, etc.
- There are three types of investment under it-
- Aggressive Life Cycle- Here, you’ve to invest until you reach 35 years of age. It takes into account 75% of your total fund in equity.
- Conservative Life Cycle- Here, the minimum fund required is 25% or 1/4th the total fund in your account.
- Automatic Or The Last Option- It is a mixture of both the above options. That is, there are a certain adjustable age gap and fund requirement for it.
- As I’ve already mentioned above, for tier I, you can go for withdrawal only after your retirement. Apart from that, a max of 60% you can extract. The remaining 40% is used for pension purpose. Another benefit is that this amount is entirely tax-free. In tier II, there are no such guidelines.
- As per section 80CCD, you can also avail of tax deductions. Yet, there’s a limit to it, i.e., Rs. 1.5 lakh.
- It is another plan meant for retirement purpose.
- EPF is specifically meant for the workers of the unorganized sector. However, it’s not feasible for the self-employed sector. Thus, they opt for PPF.
- If you’re a self-employed worker, you’re eligible to create only one account. It can either be in your or your child’s name.
- Added to that, this scheme is strictly restricted to only the Indian residents.
- Like other long term investments, it also takes 15 years to mature.
- The most important feature that makes it one of the most popular investment is its minimum premium amount. That is, the minimum scale is stuck at Rs. 500 per month. Yet, the maximum amount that you can deposit annually is Rs. 1.5 lakh.
- You can go for a one-time deposit or deliver it on a yearly premium. However, once you start investing in it, you need to continue until the end of the maturity period. In case you fail, you need to compensate it by paying the required penalty amount.
- The interest on your amount gets counted every month. However, it gets accrued only at the end of the accounting year.
- The tenure period of this scheme is 15 years. However, on the will of the subscriber, it can get extended for another 5 years as well.
- You’re free to withdraw a max of 50% of the total amount at the end of the 7th year of subscription.
- Another feature that adds a star to this scheme is its tax benefits. As per section 80C, it provides tax exemption as well.
8. National Savings Certificate or NSC
- Like most of the savings schemes, it is also government furnished. The Indian post offices work to provide this scheme.
- The maturity period is, however, less, i.e., 5 years.
- Unlike the last scheme, here, the interest gets accrued every 6 months.
- Like most savings schemes, it is limited only for the Indian residents.
- In case, you become a non-resident of India after subscribing for this scheme; you can hold on to it. In this case, you can keep investing in it until the scheme gets matured.
- The most important factor that makes it one of the most preferred investment is its least investment amount. That is, the minimum amount for which you can go for this scheme is Rs. 100.
- Another benefit is its tax benefit. As per section 80C, it also provides an exemption from tax levitations.
- In case of transfer of the account from the name of one person to another, it’s easily feasible.
- Added to that, it’s available in the modernized form, i.e., the Demat form.
- The current rate of interest is stuck at 7.8%. You must be knowing by now how big this interest rate is to multiply your amount.
9. Senior Citizen Savings Scheme or SCSS
- The major aspect to consider in this scheme is its age requirement. That is, you must be at least 60 or above to opt for this scheme.
- You can create an account in this scheme in a bank pr post office.
- This scheme has a tenure period of 5 years. However, if you wish, you can extend it for another 3 years. Yet, this can be used only once during the tenure period of the scheme.
- You can create a single account or a joint one with your spouse.
- You can create one to more than one account. However, the maximum amount you can invest in this scheme is Rs. 15 lakh in your total accounts. That is, the total amount in your 15 accounts shouldn’t exceed this limit.
- The interest gets accrued every quarter. Although it’s taxable, yet, there’s no TDS subtraction.
- The current annual rate of interest is 8.4%.
10. Post Office Monthly Income Scheme or POMIS
- This scheme is quite different from the others. It aims at providing a monthly salary to its subscribers.
- It is a short term investment with a tenure period of 5 years.
- There is a certain minimum amount that you need to deposit, i.e., Rs. 1500 per month. However, the maximum limit is at Rs. 4.5 lakh. That is, you can’t deposit more than this amount.
- However, in case you plan to create a joint account with your spouse, you can raise the limit to Rs.9 lakh. That is, you can deposit a max of Rs. 9 lakh.
- There is a provision of withdrawing before its maturity, i.e., after at least 1 year of subscription. However, you’ve to bear the penalty charges.
- The current annual interest rate is 7.5%.
11. Post Office Term Deposit or POTD
- Even the post offices provide a provision of term deposits. However, it is restricted to a short period of 1year, 2 years, 3 years or 5 years. There is no 4 years term period.
- Although there’s no maximum range to its monthly or annual deposition. Yet, the minimum amount is stuck at Rs. 200.
- The interest gets accrued every quarter.
- It also provides an additional benefit of tax exemption under section 80C.
It provides a varied interest rate as per the term year.
Go through the table below to know more about it-
|Rate of Interest
12. Kisan Vikas Patra or KVP
- It is just another short term investment plan with a term period of 115 months or 9 years, 7 months.
- You can extract the amount only after completing a subscription period of at least 2.5 years.
- You can make depositions in the amounts of Rs. 1,000, Rs. 5,000, Rs. 10,000 or Rs. 50,000. In this scheme, you won’t find any such maximum range for the deposition.
- In need of transfer, you can easily shift the account from your name to any of your acquaintances.
- However, it has a disadvantage. Unlike other schemes, it gets tax imposed. Even the accrued interests get tax impositions.
- The current annual interest rate is 7.5%.
13. Sukanya Samriddhi Scheme Or SSS
- This scheme is specifically framed by our Indian government for the girl child in a family.
- If your daughter ages less than 10 years, you can go for this scheme. In case of the absence of the legal parents, the girl’s guardian can create an account as well.
- Banks like SBI, ICICI, Axis bank, etc. provide this scheme.
- In one accounting year, the least amount you need to deposit is Rs. 1,000. While the maximum amount is Rs. 1.5 lakh in one accounting year.
- The interest in this scheme gets accrued on a compound calculation basis.
- The maturity period lies at 21 years after the subscription of the scheme. However, in case your daughter agrees to marry before that, you’re free to withdraw the entire amount. Yet, it is mandatory to note that your daughter must be 18 or above to avail of the benefits. Added to that, it also provides tax benefits to the subscriber during withdrawal.
- The current annual interest rate is 8.3%.
14. Direct Equity And Equity Oriented Mutual Funds
You must have heard of people getting high returns from their equity investments. These speculations though yield a high return, they might end up in a huge loss if not handled properly.
- There is risk associated with these investments, however, your returns can be as high as 20% of the total investment.
- On the other hand, if you make a single mistake, you can lose about 50% or more.
- You can double your invested amount in about 4-5 years.
15. Bank Fixed Deposit
Starting from educated to the uneducated section of people, most people prefer the fixed deposit investment. It is quite easy to handle and transfer the required amount. There is no such required installment payments nor any strict requirements. Added to that, you can even transfer the required amount from your savings account to FD within seconds.
Added to that, it’s the most secure option when it comes to a risk-free investment option. However, under fixed deposits, there are three types. Let’s go through each of them in detail.
i. Bank Deposits-
It is the simplest deposit under this category and subscribed by many. However, the minimum amount which you can go for FD make is Rs. 5,000. There’s no upper limit to this scale.
Managing it is very easy and can be handled online. Getting returns is guaranteed but the interest amount depends on your deposited amount. The more you deposit, the more interest you earn.
ii. Company Deposits-
It is almost similar to bank deposits. The only difference that lies is that in place of the bank, it’s a company here.
In comparison with banks regarding safe and secure, bank deposits are comparatively safer. The safety measures get regulated by the regulation policies. Thus, it’s maintained by the banks better than companies.
Apart from that, companies can go up and down the curve in profit-making. On it depends on your profit as well.
iii. Mutual Fund Fixed Maturity Deposit Plans-
It is like the normal fixed deposits you talk about. Here, you need to deposit a certain specific amount and leave it untouched for a few years. The prevailing market interest rate gets accrued on the deposited amount. Over the years it gets added summing up to a final lump sum.
In each such mutual fund scheme, you might notice a feature like ‘closed or open-ended scheme. It marks it as fixed maturity deposits.
16. Recurring Deposits-
- If you want to learn the habit of savings, this is the best option for you. There is no such minimum deposit for this scheme. You can keep aside an amount as small as Rs. 10.
- You can expect a minimum return of at least 7% of the total amount you invested annually.
- This scheme, however, takes a longer duration to double up, i.e., 10.5years approx.
17. Liquid Mutual Fund-
- If you have certain cash that you’re not going to use shortly, you can invest in this scheme.
· This scheme has a very short tenure period of about 3 months.
- The returns are quite less as compared to the normal fixed deposits. It is about 5-6%.
- The time required to double the amount is about 11 years.
18. Ultra Short Term Debts Mutual Funds Plan-
- The amount speculated here is in the form of bonds.
- The tenure period is more than 3 months and less than a year.
- Although the risk is associated, still you can expect a high return of about 7-9% on your annual depositions.
- You can double your deposited amount within 8-10 years.
19. Savings Account (Sweep in Facility)
The only difference that lies in this scheme as compared to the savings account is it provides broader flexibility. Apart from that, you can avail of a higher return as compared to a normal fixed deposit.
- Here, if your deposits or amounts in savings account exceeds a certain range, it gets shifted to your fixed account.
- You can expect an annual return of at least 6.5-7.5% of the amount invested.
- You can double your amount if you wait for about 9.6 years.
20. Short Term Debt MF
- You can expect a good return from this investment.
- This scheme weaves a modest risk with good security of your investment.
- You can assume the least return of 8%. It can even exceed.
- The lock-in period is of 3 years and you can withdraw the amount only after the completion of the tenure period. In case of emergency, if you wish to retrieve the amount before the maturity period, you need to deposit a penalty. The penalty amount is 1% of the total amount.
- You can double the amount invested within 7.2 years.
21. Infrastructure Bonds
- It is a government-furnished investment option which adds to its security and safety.
- The bond amount is even tax-free under section 80C but up to Rs. 20,000.
- You can get yourself furnished with this scheme from NABARD, IDBI, etc. institutions.
- This scheme ends within 10-15 years of its issue.
- The current interest rate is 6.77%.
22. Pradhan Mantri Vaya Vandana Yojana Or PMVVY
- If you’re above 60 years of age, then, congratulations, you’re free to avail of this scheme.
- You can pay the premiums every month or every 3 months or half-yearly or on an annual basis. You can choose anyone and can continue with it.
- The current interest rate lies at 7.4% per annum.
- There lies a range of minimum amount and maximum amount that you need to follow while its premium payments. The minimum deposition is Rs. 1,000 while the maximum range lies at Rs. 9,250.
- You can expend a max of Rs. 15 lakh in this scheme.
- The lock-in period is of 10 years.
- At the end of the maturity period, you can receive the amount. However, in case of the demise of the subscriber, his nominee can avail of it. The nominee can be a family member or an acquaintance.
- This scheme provides high security and a guaranteed return.
23. Gold Monetisation Scheme Or GMS
- As per this scheme, you can obtain interests based on your gold you’ve stored in your locker. It is like just for keeping your precious assets in a locker, you can earn well. These gold assets can be in the form of jewelry, coins, etc.
- These assets have to undergo a test of its purity before getting locked in the account. The pureness of the assets converts it into respective bars. Then, the banks assign certain interest rates to the gold bars.
- The current interest rate is prevailing at 2.5% every year.
- You can extract before its term period as well. However, you’ve to pay certain penalty amounts for that.
24. Commercial Real Estate
The property values or investment in real estate can be high profit-generating. Many people go for this type of investment to raise their side income. You must have heard or seen in many cases that people purchase old or broken properties at a small rate. Then modify and sell at a higher rate. The difference between the cost and selling price is the profit. Here, the profit is generally quite high.
Apart from that, you can also create a rental income from your real estate property. Thus, this type of investment is guaranteed to generate profit and opted by many.
- You can expect an average return of at least 12%. Apart from that, you can double your invested amount in about 6 years.
- This investment, however, takes time to generate income. However, once started earning, there’s no returning.
The expected return you can aim from gold is quite high as marked during the previous few years. However, it is to note that the gold does not hold any conjectural value. Its value per price depends on the market rate and demand. With an increase in demand, its value may increase or vice versa.
On the other hand, the demand for gold can never go down the curve because of its high demand, especially among women. However, a guaranteed income from gold cannot be made. To generate profit, you need to sell at a higher rate than its purchase rate.
However, it is true to consider that gold is one of the emergency assets. That is, in times of emergency, you can easily sell the required gold for money.
26. Antique Property Or Art
It is not quite common among people like gold or property investment. Normally people don’t take it seriously like the rental income or gold investment. But, antique property or art from renowned artists worth lakhs or millions.
However, unlike the interest rate in the bank or rental income, you can’t fix a certain unchangeable amount for the property. The beauty of the art or antique lies in the eyes of the beholder. Its value is generally fixed by the viewer.
- These are one of the long term speculations yet, can earn slow but high gains. It returns somewhat depends on the prevailing inflation rate.
- Since it depends on the inflation rate, there is a risk attached.
- This scheme is normally handled by the government. Yet, sometimes PSUs or the private NCDs handle it.
- You can expect a yearly return of at least 7% and it may rise to 10% as well.
- You can multiply the invested amount by two in about 7.2 years. However, the interest accrued gets tax imposed.
- Apart from that, the interest rate may vary depending on market performance.
- The best part of this investment is the lock period is about 7-15 days. That is, you can earn a return in about half a month.
- You can double your invested amount within 3-4 years.
- You can expect a return of at least 20-25% the total amount invested if the scheme works proficiently. However, if it fails to earn well in the market, you might fall on a loss.
- This scheme has a high risk of its investment. It may either lift you to the peak or throw you down the trench. So, if you are ready to face the loss, go for it.
Alternative Investment Plans
If you’re done with the above investment options, you can understand the remaining options that I’m going to explain. These options are not everyone’s piece of cake. So, you must be a pro in the investment options for a high profit. Otherwise, you will end up with a loss.
However, if handled properly, you can wave high on the profit gained. Since the stream is quite risky, it’s opted by less. So, go through the explanations below to know more about it.
1. FUTURES Trading
Let’s go by an example to make your understanding clear on its working procedure.
Normally, if you purchase 10 shares of Reliance Jio with the present trading per share Rs. 550. Shortly, it increases to Rs. 600, you’re likely to sell it.
- Thus, getting 10 shares at Rs. 550 totals up to Rs. 5,500.
- Selling it at Rs. 6,000 will give you Rs. 6,000.
- Hence, the net profit is Rs. 6,000 – Rs. 5,500 = Rs. 500.
- Calculating your return rate, it would be 500/5,500*100 = 9.09%
- At the same time, if you’re opting for the FUTURE procedure, your profit might double up.
By the procedure of FUTURE
Let’s say you bought 10 shares of reliance jio in the same amount as mentioned above. The only difference that lies in this procedure is that you need not pay the total cost price. That is, you have to pay a certain percentage of the total cost price.
Let’s assume the margin price is 20% of the total cost price. Thus, 20% of the total cost price = 20/100*5,500 = Rs. 1,100. Hence, you have to pay Rs. 1,100 as the cost price.
Thus, the total profit earned would be 500/1,100*100 = 45.45%. It is much more than the amount you got in the normal procedure.
2. OPTIONS Trading
Just like the FUTURE, let’s understand it with an example.
Like the above examples, let’s continue with the same values to avoid confusion. The trading rate is stuck at Rs. 550. Shortly, after a few months, it may reach up to Rs. 600.
In the options trading, you need to sign a deal. Let’s say as per the deal you’re willing to purchase the shares as Rs. 630. To fulfill the conditions of the deal, you need to pay an additional premium amount of 1% the cost of per share. This results in giving Rs. 5.50 per share.
Thus, after months when it would get traded at Rs. 650, you can buy it at Rs. 630 + Rs. 5.50 = Rs. 635.50. Hence, you can buy this amount and sell at Rs. 650. This would generate a gain of Rs. 15.50 per share.
Thus, your return rate would be 15.50/635.50*100 = 2.43%
You must be thinking that the rate of profit earned is quite low. Isn’t it?
Best Schemes For One Year Plan
There are a few investments that can yield good results in a year.
These are mentioned below-
- Fixed maturity schemes
- Debt mutual funds
- Post-office term deposits
- Arbitrage mutual funds
- Recurring deposits
- Fixed deposits
Best Schemes For Three Years Plan
Mentioned below are the schemes that you can opt for a tenure period of three years with good returns-
- Savings account with a sweep in facility
- Short term debt mutual fund
- Equity-linked savings scheme
- Fixed deposits
- Recurring deposits
Best Schemes For Five Years Plan
Mentioned below are the schemes that get matured within 5 years with good returns-
- Direct equity and equity-oriented mutual funds
- Real estate-residential
- National Savings Certificate
- Tax saving fixed deposit
Key Points To Keep In Mind Before Opting For An Investment
1. Return Rate
When you are investing in something, the first thing that comes to your mind is how much shall I get back. Isn’t it? Everyone aspires to acquire more than they have lent. Yet, it is hardly possible for all to get into profit hands. It strictly depends on the scheme to choose according to your goal.
If you’ve buried a secret goal in your mind to purchase a car or a flat, you need to choose the scheme likewise. As per your goal, you need to fix your deposition amount. Similarly, the return rate of the scheme also plays a great role to decide the total amount you can get.
2. Tenure Period
You cannot expect to receive a lump sum overnight. You need to be diligent and keep patience till the completion of the tenure period of the scheme. However, in case of any urgency, you can extract the required amount. In some schemes, there is an additional penalty payment, while some do not bear such restrictions.
3. Risks Attached
This is one of the major factors that you must repeatedly check before going for a scheme. The scheme may be providing a high return in a short tenure period. But, if the investment is not risk-free, it would be haste in vain.
Frequently Asked Questions
1. What are the best investment options in India?
However, mentioned below is a list of the most preferred investment options or schemes in India.
2. Which investments have the best returns?
i. Savings account
ii. Savings bonds
iii. Certificates of deposit
iv. Money market funds
v. Treasury bonds
vi. Corporate bonds
vii. Dividend-paying stocks
3. Which is the best scheme for a monthly income?
a. Post Office Monthly Income Plan- It is one of the most preferred options to generate a salary every month. For an instance, if you devote about Rs. 5 lakh in this scheme, you can receive about Rs. 3,000 per month. Taking into account the prevailing interest rates, i.e., 7.7%, you can compute it.
You can devote at least Rs. 1,500 monthly towards it. The maximum scale aligns at Rs. 4.5 lakh at a time. However, you can raise it to Rs. 9 lakh if you’ve created a joint account. This joint account can be with your spouse. Apart from that, you can expect to double your speculated amount after 9 and a half years.
b. Mutual Fund MIS- Even the mutual funds offer a monthly income scheme. However, it somewhat depends on market functionality. Apart from that, it doesn’t provide any TDS benefit as well. One good point you can consider is, there’s no range available. That is, you can deposit as small amount as Rs. 500 and as big as Rs. 5 lakh.
Choosing the best scheme is as hard as choosing the recipe from the menu card in a restaurant. But, since you’ve gone through the list and details respectively, you can decide. You have to make a list of your priorities and goals and choose accordingly. I hope, I was able to clear all your doubts regarding the list of all popular investment options in India.