banner

Top 10 Investment Options in India for 2022

Learn about the best investment options in India.Get Rs.9.46 Lakh@ After 15 Years On Investment Of Rs.5000/month

#Investments 100 Views 83 Shares
banner

Choosing the best investment options for wealth management is an area of concern for people of all income groups. While accumulating money is crucial for a financially secure future, it does not make sense that you rely on savings alone.

Instead, opting for the top investment options in India is one way you can make your money grow over the years. Investments are often seen synonymous with the stock market or equity money. However, it is only partly true. Apart from these, some of the best investment options in India include fixed deposits, Unit Linked Insurance Plan (ULIP), Liquid funds, and government bonds.

There are several long-term and short term investment options which you can opt for, considering your goals and risk appetite. Many top investment options in India offer additional returns in the form of guaranteed additions. At the same time, it is prudent that you consider diversifying your portfolio with good investment options for maximizing returns and minimizing associated risk. 

10 top Investment Options in India in 2022

Listed below are some of the best investment options in India for 2022:

1. Fixed Deposits and Recurring Deposits

 Mutual Funds

 Direct Equity

 Post Office Saving Scheme

 Bonds

 National Pension Scheme (NPS)

 Unit Linked Insurance Plans (ULIP)

8. Liquid Funds

 Public Provident Funds (PPF)

10. Senior Citizen Savings Scheme (SCSS)

Let us look in detail at some of the best investment options available in India for growing your money:

1. Fixed Deposits (FD) and Recurring Deposits (RD)

Fixed Deposits (FD) and Recurring Deposits (RD) have continued to be a popular investment among many investors especially those who seek guaranteed returns with minimal risk. FD and RD accounts can be easily opened with leading banks and Non-Banking Financial Companies (NBFCs) as well as the post office. Key features that make FD and RD a popular investment choice for 2022 include:

  • Assured returns
  • Minimal risk to principal invested
  • Flexible investment amount
  • Option of loan against FD in an emergency
  • Simple renewal and withdrawal facility

While FD and RD investments in India offer comparable returns, fixed deposits are better suited to grow a lump sum investment with interest earnings. Recurring deposits, on the other hand, are better suited to inculcate a savings habit and steadily through regular monthly investments into the account along with interest earnings.

2. Mutual Funds

While investment in mutual funds is subjected to market risk one should evaluate the risk before investing. If you understand the market and its risks, mutual funds can become your best investment options to grow money multifold. Whether you are going for short term investments or long term, you can create an investment portfolio based on your preferences.

If you have a lower risk appetite and want a fixed income from mutual funds, monthly systematic investment plans, or systematic withdrawal plans can be good investment optionsIt can also be a favourable choice if you are looking for a high return investment in India.

Best Investment Options Available in India Max Life Insurance

2. Mutual Funds

While investment in mutual funds is subjected to market risk one should evaluate the risk before investing. If you understand the market and its risks, mutual funds can become your best investment options to grow money multifold. Whether you are going for short term investments or long term, you can create an investment portfolio based on your preferences.

If you have a lower risk appetite and want a fixed income from mutual funds, monthly systematic investment plans, or systematic withdrawal plans can be good investment optionsIt can also be a favourable choice if you are looking for a high return investment in India.

Best Investment Options Available in India Max Life Insurance

3. Direct Equity

One of the first things you should figure out is whether you are looking for long term or short term investments. Direct equity investing is one of the best investment options for long term purpose. It is about the equity shares of a company, which binds you in legal terms related to the company ownership.

By buying a company’s shares, you also get the right to get involved in company meetings and have your say on the company’s decisions. Also, you get the profits as distribution in proportion to your shareholding in the company.

As an investor, you must know that a company’s performance has an impact on the share price, both positive and negative. Depending on the market conditions and your risk appetite, you can also choose to give up the shares back later either to the company or a third party.

4. Post Office Saving Schemes

These are deposit avenues for investors made available by India Post, the body that controls postal chain in the nation. This investment option was once introduced to help people inculcate the habit of disciplined savings in life while also providing investment avenues to aid in financial planning.

What makes these schemes one of the best investment options is the ease of enrolment or application. You can invest in these savings schemes by visiting the nearest post office branch.

Saving schemes that fall under post office investments include:

  • Post Office Savings Account
  • Post Office Time Deposit Account (TD)
  • 5-year Recurring Deposit Account (RD)
  • Monthly Income Scheme Account (MIS), and many others
     

5. Bonds

Just like individuals, companies and government bodies need fund for infrastructural development and social programs, for which they issue bonds to the public markets. The interested investors then buy the bonds to help these entities raise money.

In other words, bonds are fixed-income investment options that cover the loan made by an investor to a corporate or governmental borrower.

What makes them one of the best investment plan in India is that the terms for fixed interest payment, loan principal, and tenure are all included in the bond details. Hence, it assures you of the safety of your investment along with an additional return.

Also, bond prices are inversely proportional to the offered interest rates. It means that these price fall when interest rates increase and vice versa.

6. National Pension Scheme (NPS)

The National Pension System (NPS) also known as the National Pension Scheme was initially introduced to replace the pension schemes for State and Central Government employees. But from May 1, 2009 onwards NPS investments were made available to all citizens of India. NPS investments can be made into two accounts – Tier 1 account and Tier 2 account. As per current rules, only NPS Tier 1 account provides tax benefits and is mandatory. The Tier 2 NPS account is optional and does not have any tax benefits.

Some features and benefits of NPS that make it one of the best investment options for 2022 are:

  • Flexible investment amount starting from only Rs. 500 annually
  • Option to choose your own investments like Equity, Debt, Government Bonds etc.
  • Tax benefits under Section 80C and additional tax benefit under Section 80 CCD (1B)
  • Option to make partial withdrawals in case of medical or financial emergencies
  • Long term investment to provide financial security after retirement

Best Investment Options Available in India Max Life Insurance

6. National Pension Scheme (NPS)

The National Pension System (NPS) also known as the National Pension Scheme was initially introduced to replace the pension schemes for State and Central Government employees. But from May 1, 2009 onwards NPS investments were made available to all citizens of India. NPS investments can be made into two accounts – Tier 1 account and Tier 2 account. As per current rules, only NPS Tier 1 account provides tax benefits and is mandatory. The Tier 2 NPS account is optional and does not have any tax benefits.

Some features and benefits of NPS that make it one of the best investment options for 2022 are:

  • Flexible investment amount starting from only Rs. 500 annually
  • Option to choose your own investments like Equity, Debt, Government Bonds etc.
  • Tax benefits under Section 80C and additional tax benefit under Section 80 CCD (1B)
  • Option to make partial withdrawals in case of medical or financial emergencies
  • Long term investment to provide financial security after retirement

Best Investment Options Available in India Max Life Insurance

NPS investments do not have guaranteed returns as they invest in market-linked instruments. However, considering the unique tax benefits and its potential to generate inflation-beating returns, NPS is still one the best long-term investments in India right now.

7. ULIP

Another investment option for individuals who want market linked returns along with insurance is Unit Linked Insurance Plan (ULIP). You can buy a life insurance which helps to invest in different funds and give you life cover option at the same time. ULIP has become one of the best investment plan in India.

This top investment option in India offers dual benefits of insurance and market investments, which helps you systematically grow your money. You can choose the most suitable policy tenure based on whether you prefer long term or short term investment options. Additionally, ULIP also offers tax benefits under section 80C of the Income Tax Act 1961.

8. Liquid Funds

Liquid funds are like stock market investments, wherein money is invested in government bonds and securities. Since there is no lock-in period, it allows you to withdraw money as per your requirement; thereby making it one of the best investment options in the market.

When it comes to short term investments, liquid funds are the one of the best investment options in India. You can invest in it for 3-5 years and withdraw money as per your requirement for fulfilling your short term goals. They are less subject to market risks than mutual funds, which also makes it one of the best investment options.

9. Public Provident Fund (PPF)

Public Provident Fund is a government backed scheme that provides guaranteed returns based on the applicable interest rate. The PPF interest rate in decided by the Government and liable to change every quarter. The current interest rate from PPF is 7.1% and will be in effect till September 2022.

Although the maturity period of PPF is 15 years, you can start the partial withdrawal of your money after completion of six years. However, you can also use your PPF balance as security to take loans. It falls under the EEE category of tax savings, since the principal amount, interest earned, and maturity amount – all are eligible for tax savings. Thereby PPF is one of the best investment options available. As per Section 80C of the IT Act 1961, you can avail tax deductions for your contribution towards the PPF account. 

10. Senior Citizen Savings Scheme (SCSS)

It is one of the best investment options backed by the Government of India and is meant for people above 60 years of age. The amount deposited in this scheme matures after five years from the date on which the account was opened. It can also be extended for once for the next three years.

What attracts senior citizens in India to this scheme the most is the interest gained over savings. Currently, the SCSS interest rate is 7.4% till September 2022, which is one the highest amongst government-backed saving schemes available in India.

Comparison of Risk Profiles of Some Common Investments in India

Top Investment Options Max Life Insurance

It is one of the best investment options backed by the Government of India and is meant for people above 60 years of age. The amount deposited in this scheme matures after five years from the date on which the account was opened. It can also be extended for once for the next three years.

What attracts senior citizens in India to this scheme the most is the interest gained over savings. Currently, the SCSS interest rate is 7.4% till September 2022, which is one the highest amongst government-backed saving schemes available in India.

Comparison of Risk Profiles of Some Common Investments in IndiaTop Investment Options Max Life Insurance

As an investor, you must make investment decisions based on your risk appetite. Based on the associated level of risk, various investment options in India are classified as follows:

Levels of Risk Involved

Investment Options

Description

Low

Fixed Deposit

Assured returns with no risk to investments

Low

Public Provident Funds

Government-backed investment option for retirement planning

Medium

Balanced Mutual Funds

Holdings that are balanced between debt and equity

Medium

Debt Funds

Mutual funds that invest in fixed-income securities like bonds

High

Direct Equity

Long term investment option to get ownership rights of a company

High

Equity Mutual Funds

Mutual funds that invest mainly in stocks

FAQs About Choosing the Best Investment Options in India

Q. Investing seems difficult. How to choose the best investment options? 

A. To start your investment journey, you should identify your goals, i.e. whether you prefer long term or short term investment options. Then consider the level of risk you are ready to take with the amount you have.

Q. What types of investment options in India are suitable for an average person? 

A. As detailed above, there are various investment options in India that you can choose to build your portfolio. What is most important is that you have a financial goal(s) associated with your investment decisions. A diversified portfolio of long term and short term investments can be favourable.

Q. Is it too risky to invest in stocks? 

A. Stocks are high risk-high return investment options. It means that you get higher returns for the calculated risks you take while investing money. Since the returns are market-linked, it is not easy to predict the related ups and downs. So, be sure you understand the risks associated with it before investing.

Q. Why should I check my risk tolerance before investing money?  

A. Risk tolerance is about how many risks you are willing to stomach. Knowing about it is crucial to choose good investment options as it helps you avoid financial burden, if any that may come up with your investment decisions.

Q. What do you mean by a diversified investment portfolio? 

A. Having a diversified investment portfolio means investing in a wide variety of assets, and not just in any specific type. It helps protect your investments if any of the assets falters.

These, as mentioned above, are some of the top investment options available in the market, which you can opt as per your goals and risk appetite. However, there are other investment +insurance plans offered by Max Life that provide benefits for life insurance as well as guaranteed benefits on maturity. The Max Life Smart Wealth Plan is a comprehensive plan which can meet your financial goals adequately.

Q. What Are the Best Investment Options for Good Return? 

A. There is no single best investment option for each individual. It depends on your financial standing, investment goals and risk appetite. There are several long term and short term investment options in India, which can fulfil the requirement of diverse financial profiles. You can consider the short term investments to fund goals in the near future, whereas long-term investments for milestones such as retirement.

Q. Is It Good to Choose Long Term Investment Option? 

A. Choosing between long term and short term investment options largely depend on your risk tolerance. Long-term investing options provide stable earnings while reducing risk. So, make sure you are aware and set realistic expectations from your investment options.

Q. What Are the Risk Factors I Should Consider While Selecting Investment Options? 

A. Some risk factors that you should consider while creating an investment portfolio includes market fluctuations, time horizon, personal risk tolerance, inflation risk, liquidity risk, etc. It will help you weigh good investment options aligned with your needs and choose the right long term and short term investments.

Q. What Are the Best Investment Options for Tax Saving in India? 

A. Life insurance plans, PPF, Fixed Deposits, ULIPs, ELSS are some of the best investment plan in India for tax saving purpose.

Q. Where to Invest Money in 2022?

A.  It is best to map your upcoming financial goals to determine long-term and short-term investment options. Then, based on your unique profile, you can build a strong and diverse portfolio that caters to your specific financial needs. 

Sources:

[1]https://www.policybazaar.com/life-insurance/investment-plans/articles/best-investment-options-in-india/

https://www.aubank.in/blogs/the-difference-between-fixed-and-recurring-deposits

https://www.bajajfinserv.in/what-is-fixed-deposit

https://npscra.nsdl.co.in/features-and-benefits-of-nps.php

https://npscra.nsdl.co.in/all-citizens-of-india.php

https://economictimes.indiatimes.com/wealth/invest/what-is-the-latest-ppf-interest-rate/articleshow/92594131.cms

https://www.nsiindia.gov.in/InternalPage.aspx?Id_Pk=132

ARN: Aug22/Bg/25A

@Max Life Smart Wealth Plan|A Non-Linked, Non Participating, Individual Life Insurance Saving Plan|The guaranteed benefit are applicable only if all dues are paid

@Rs.9,46,489/-as lump sum at the end of 15 years, for 35 years old healthy male

Grow Your Capital!
Get Guaranteed Returns + Life Cover for your Future

Continue Reading

Continue Reading


#Investments

How to save tax with ULIPs

Read More



#Investments

4 Tips to Get Better Returns with ULIPs

Read More



#Investments
How to Maximize Your Returns with ULIPs?

Read More