Best Investment Options in India

All these reasons make a fixed deposit one of the best investment options, which also offers guaranteed returns. If you are seeking a healthy balance between returns and safety, you can start investing in fixed deposits as soon as possible. You can also opt for a monthly basis saving option provided by most banks and other financial institutions. 

3. Direct Equity

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.

Know More: How to Calculate Return on Investments (ROI)?

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. They were 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 options 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.

Know More: Bonds in India

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 is has also grown popular among people.

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 basis your long-term and short-term goals. Additionally, ULIP also offers tax benefits under section 80C of the Income Tax Act 1961.

Also Read: Short Term Investment Plans for Tax Benefits

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.

Liquid funds are the best investment options for higher short-term gains. 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)

A government-backed investment option, Public Provident Fund, provides you risk-free returns making it one of the best investment options. The interest is revised and paid by the government every quarter.

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)