High-Risk Investment 

As the name suggests, high-risk investment plans are suitable for investors whose primary focus is on having long-term capital growth. Meanwhile. Most high-risk investment plan in India  tend to incur substantial fluctuations but provide opportunities to create significant possible returns in the long-term. Examples of high-risk investment plans include:

1) Direct Equities 

Equities offer risk-taking investors the chance to achieve their financial goals. While every asset is essential in its peculiar way, equities have a proven track record over the long-term, vis-à-vis other assets. In an equity investment, thus, you can buy a share of the ownership in a company, which entitles the investor to the gains and losses of the business.

2) Unit Linked Insurance Plans 

ULIPs or unit-linked insurance plans are generally regarded as a great investment option in India because they offer both life insurance and investment returns benefits. Not just this, they also offer you option to move your money between high risk, medium and low risk. This is so because it allows you to invest your money in a mix of various fund options. While part of the premium amount is allocated to a variety of fund options (based on your investment objectives and risk profile), the remaining portion is used to provide the much-needed insurance coverage.

Overall, ULIPs are essentially life insurance plans that offer an additional feature of investing your money in different money-market linked assets based on your goals. Thus, ULIPs are another route to invest in a professionally managed portfolio of equities or bonds. The benefit of investing in a bond fund through ULIP is that as per the prevailing tax laws, you may enjoy tax deduction under section 80C subject to fulfilling conditions therein.

ULIPs offer a clear classification of risk categories, where you can pick up the higher risk fund for the long-term goals. You can gradually shift to lower-risk investments as your investment nears maturity.

3) Mutual Funds 

A mutual fund is formed when money is collected from different investors and invested in a company's stocks or bonds. Typically, a mutual fund is shared by thousands of investors and is managed collectively to earn the highest possible returns. The person driving the mutual fund is a professional fund manager.

Mutual funds offer diversified investment with lower investment corpus in any or multiple asset classes. For example, you can invest in a pure equity fund, a debt fund or a hybrid fund investing in both stocks and bonds.

Mutual funds may offer various risk category funds based on the type of stocks or bonds they are investing into. Index funds are considered the safest fund category among equity funds, whereas Gilt funds are the safest bet among the debt categories.

Medium Risk Investment 

As the name suggests, medium or moderate risk investments comprise investment plans that serve as diversified or balanced investments. Investment plans with a moderate risk profile provide not only the potential for growth but also willingness to accept a certain level of market volatility. Most medium risk investment plans help diversify your investment portfolio through a mix of equity and debt instruments to generate stable returns without taking any huge risks. Examples of medium risk investment plan in India  include:

As the name suggests, medium or moderate risk investments comprise investment plans that serve as diversified or balanced investments. Investment plans with a moderate risk profile provide not only the potential for growth but also willingness to accept a certain level of market volatility. Most medium risk investment plans help diversify your investment portfolio through a mix of equity and debt instruments to generate stable returns without taking any huge risks. Examples of medium risk investment plans include:

1) Hybrid debt-oriented funds

2) Arbitrage funds

3) Monthly Income Plans

Which Investment Plan best suits your financial needs in India?

Why Should You Invest?

If you are a salaried or self-employed individual, you must remember that you cannot achieve your goals with only your savings – you need to maximize your savings and create wealth through investment plans. To build wealth, you must invest your money in some of the best investment options with high returns.

If you do not invest, the chances are that you will miss out on opportunities to maximize your financial worth and wealth-building potential. While you have the risk of losing money through investment plans, you have a much higher potential to gain significantly – provided you invest wisely and on time.

How to Choose the Investment Plan?

Here is how you can choose the right investment plans from the best investment options in India:

1. Assess your financial needs and goals

2. Calculate your investment timeline to achieve each goal

3. Build a strategy by incorporating the right insurance +investment policies that align with your goals

4. Diversify your portfolio – You might have invested your money in a single investment plan, but go for multiple investment and insurance plans

5. know about different charges levied on different investment schemes

6. Review your investment plans periodically 

Factors To Consider While Choosing Investment Plans 

1. Monetary Goals 

The first thing to consider before choosing an investment plan is your monetary goals, both long-term and short-term. These goals can be anything from marriage and education to international trips and new smartphones and keeping such financial goals will help you make an informed decision. For instance, if you want to save up for an upcoming trip to your favorite foreign destination, then a recurring deposit or post office deposit might be amongst the best investment scheme for you.

2. Planned Upcoming Expenses

If you’re looking for an investment plan in India, an important step is figuring out your planned future expenses such as your child’s marriage and education or buying a home. Doing so will give you a better idea of how much you need to invest now to get sufficient returns later that can fulfill any upcoming expenditure.

3. Present Expenses 

Evaluating your present-day expenses is an essential part of looking for the best investment scheme. For instance, if you have no major expenses such as house rent then you can save or invest more for the long run. However, if you have certain monetary obligations that don’t let you save much, then investing in an investment plan with high returns will be more beneficial.

4. Financial Dependents 

When buying an investment plan in India, most people don’t take their financial dependents into consideration. However, doing so is important as you need to have an investment or savings pool that will be sufficient for the monetary goals of your dependents as well. For instance, if you only have two children who are dependent on you, then you might not need to invest as much a someone who also has their parents, siblings, and kids to take care of.

Investment Plan for 1 Year 

If you prefer short-term investments, a locking period of even 3 years can seem like a long time. However, there are many investment plans of 12 months that can also help you steer clear of market risks. Here are some  prime investment schemes for short-term you can consider:

• Recurring Deposits
• Fixed Maturity Plan
• Post Office Deposits
• Arbitrage Funds
• Debt Fund
• Fixed Deposits 

Investment Plan for 3 Year 

A common variation of short-term investment plans is 3-year investment schemes, and these are best suited for those who want high returns in a short span of time. Here are a few options you can take into account:

• Liquid Funds
• Fixed Maturity Plan
• Recurring Deposits
• Savings Account
• Arbitrage Funds 

Investment Plan for 5 Year 

Although 5 years is a long time, a 5-year investment plan in India is typically considered as a short-term investment with low market risks. However, the returns of a 5-year investment scheme are much higher compared to other short-term investments. So, here are some options you can evaluate:

• Savings Account
• Liquid Funds
• Post Office Time Deposit
• Large Cap Mutual Fund 

Documents Required to Buy Investment Plans

1) Proof of Income
 

2) Proof of Address
 

3) Proof of Identification
 

4) Proof of Age
 

1. Officially Valid Documents (Any of these)

• Passport
• Voter’s ID
• Job card issued by NREGA duly signed by an officer of the State Government
• Aadhaar Card
• National Population Register containing details of name, address and Aadhaar number
• Or any other document as notified by the Central Government
   

2. In addition to the Officially Valid Documents

• PAN Card/Form 60
   

3. In case Officially Valid Documents does not contain updated address

• Utility Bill (Not more than two months old) of any service provider (electricity, telephone, postpaid mobile connection, piped gas, water)
• Property or Municipal Tax Receipt
• Pension or family pension payment orders (PPOs) issued to retired
• Employees by Government Department or PSUs, if they contain the address
• Letter of allotment of accommodation from employer issued by State or Central Government departments, statutory or regulatory bodies, PSUs, scheduled commercial banks, financial institutions and listed companies
   

5. Income Proof
 

For Salaried Individuals (Any one)

• Bank statement showing salary credit for latest 3 months
• Latest 2 years Income Tax Returns
• Latest year Form 16
   

For Self Employed (Any one)

• Latest 2 years Income tax returns not filed in same year along with Computation of income
• If computation of income not available: Latest 3 years Income tax returns not filed in same year
• CA certified Audited balance sheet and profit loss account for latest 2 years
• Form 26 AS
   

Benefits of Investment Plans

The benefits of incorporating different investment plans in your financial portfolio include:

1) Wealth Creation 

Investment plans can help you build wealth without worrying about life's uncertainties. As an investor, you can choose from the investment options in India depending upon your risk tolerance, expected returns and amount available for investment.

2) Sustainable Financial Protection 

Having different investment plans in your portfolio will help you avail of significant returns on your investments. At maturity, you will receive the returns with profit in your pocket. This way, you can avail of long-term financial security for yourself and the family.

3) Death Risk Coverage (Available only with Unit Linked Insurance Plans) 

ULIP Investment plans (such as Max Life online saving plans) offer death risk coverage options. By investing in these investment plans, you can be sure that your loved ones remain financially secure, even in your absence.

4) Retirement Savings 

You can invest your savings in some of the investment options in India, to create a corpus that will serve as a source of income post-retirement.

5) Flexibility 

With the different investment plans available today, you can avail of the flexibility of selecting the investment amount and its tenure based on your goals and timelines.

6) Tax Saving Benefits

Investment plans such as ULIPS, online savings plans, and Equity Linked Savings Schemes (ELSS) provide opportunities for wealth accumulation through market-linked returns. At the same time, these investment plans also offer significant tax saving benefits under Section 80C of the Indian Tax Act 1961. Under these two sections, both the premiums payable and the insurance payouts are tax-deductible, and Tax exempted, respectively.