Best Investment Options in India 2023

Looking for investment options to grow your hard-earned money and make you financially secure, which also helps you in overcoming your tough times and situations?

What are the Best Investment Options in India?

Below are the 20 best investment options:-

1. Mutual Fund Investment

Mutual Fund Investment is the ideal investment plan as it offers high ROI over the long term. Mutual funds are different financial instruments to invest in equity, debt, stocks, money market fund, etc. The returns are market-based performance; therefore risk is higher. Mutual Fund Investment lets you be exempt from the wealth tax, diversified investment portfolio which helps you to achieve the financial goals and is transparent to make a wise decision.

a. Equity Mutual Funds

In an equity mutual fund scheme, investors need to invest at least 65 percent of their assets in equity and equity-related instruments, as per the SEBI Mutual Fund guidelines which can be handled actively or passively.

b. Debt Mutual Funds

If an investor seeking steady returns then an investor can apply for the Debt mutual fund schemes option where primarily invest in fixed-interest generating securities like corporate bonds, government securities, treasury bills, commercial paper, and other money market instruments which carries less risk as compared to equity funds.

2. National Pension System

This scheme organized by the Indian government which is a long-term retirement-focused investment product managed by the Pension Fund Regulatory and Development Authority (PFRDA) for the employees of all the sectors in India and offers plans on equity debt, corporate debt and government bond. In NPS, the lower limit of the deposit is only ₹6000 a year and there is no upper limit of deposit. An investor just needs to deposit ₹1,000 in a financial year to keep the account active, but an investor cannot withdraw their invested amount before the age of 60. . NPS is of two types:-

1. Tier 1

An account can be opened by visiting an authorized bank, any of its branches called point of presence (POP), or by visiting the eNPS web portal.

2. Tier 2

This is a voluntary account that can be opened by the one who already has an NPS Tier 1 account.

3. Public Provident Fund (PPF)

Public Provident Fund (PPF) is one of the best and safest investment options in India. An investor can open his account with a minimum of ₹500 and up to ₹1.5 Lakh which can be deposited in 12 installments as well. While investing, earning, and withdrawing investors no need to pay tax at all as per the income tax implication EEE (exempt, exempt, exempt) tax category. PPF amount deposits qualify for deduction from income under Section 80C of the Income Tax Act.

4. Bank fixed deposit (FD)

It is a well-known investment option in India that carried fixed returns whose interest rate range varied from 6.50 to 7 percent with no risk, loss, and market fluctuation. Fixed Deposit offers cumulative and non-cumulative investment options. In cumulative, the interest will be paid whereas non-cumulative, the interest will be reinvested and will be paid at maturity within a cumulative option. It is the safest instrument tool that provides great financial stability which lets you earn high returns on a surplus fund. Renewal of fixed deposits is easy and certain banks provide overdraft facilities against fixed deposits. Its tenures can be of a minimum of 7 days to a maximum of 10 years.

5. Senior Citizens’ Saving Scheme (SCSS)

Senior Citizens’ Saving Scheme (SCSS) available at Indian Post Offices and banks, which are the risk-free tax-saving investment options for senior citizens above 60 years. It offers regular income with an interest rate of 7.4% per annum for 5 years and can be extended further up to 3 years. The maximum amount an investor can invest is ₹15 lakh. The nomination facility is accessible and also, in case of financial emergencies, the investor can withdraw his funds prematurely.

6. Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The Pradhan Mantri Vaya Vandana Yojana for 60 years senior citizens offers 7.4 percent assured return every year. The minimum amount of pension is Rs 1,000 and can go up to the maximum sum of Rs 9,250 which can be paid monthly, quarterly, semi-annually, or annually as per the scheme you chose. A loan can be taken upon 75% of the purchase price if the scheme holds for 3 years. In case of the demise of the senior citizen, the amount will be then paid to the nominee, respectively.

7. Direct equity

If investing in stocks is not your cup of tea, want to rid of trading hassles, or you aren’t much proactive with stocks, marketing updates then you may go for the direct equity investment option as it delivers higher than inflation-adjusted returns compared to all other asset classes. The investor needs to open a Demat account to invest directly in equity where all of your capital rises unless one opts for a stop-loss method to curtail losses. Direct equity assists you with getting a good deal on commissions and related costs. This little saving puts resources into the plan and it might assist you with making additional profits over a long time.

8. Real Estate Investment

Most investors love to invest in different sectors of real estate like retail, housing, commercial, hospital, manufacturing, etc. which works as a tangible asset that returns a high value. It lets you have your portfolio, lowers your volatility and the investments get liquidated if investors sell them.

9. Gold Exchange Traded Funds (ETF)

It is a combination of gold investment and stocks. It can be easily bought and sold which provides high returns. It can be used as security for secured loans.

10. RBI Taxable Bonds

RBI Taxable Bonds issued certificates as proof for Rs 1000 offers a rate of interest of 7.75% per annum with 7 years tenure. These bonds operate through Demat only that are sanctioned to the Bond Ledger Account (BLA) of the investor. An investor receives interest in any cumulative or non-cumulative form. In cumulative, the interest can be accessed as regular income, whereas, in non-cumulative, reinvested interest is offered within the cumulative option which makes this investment option best. Premature withdrawal for senior citizens with some criteria is also available.

11. Initial Public Offerings (IPOs)

IPOs, launched by reputed companies are ideal for the long term as a low-risk investment option. In Initial Public Offering IPOs, the new companies invite the public to buy their company’s shares before listing on the stock exchange. Initially, rates were low but inflated with time and market conditions. It is useful for founders of private companies and investors wherein they cash out the early investment. Although, IPOs have a set of risks that you need to take care of before you decide to invest in them.

12. Post-Office Saving Scheme

Ideal for retired people who need a regular income. Any Indian resident can undoubtedly open a Post-office MIS account beginning with an amount of Rs 1500 at least. The day the account is opened, the maturity time frame starts, i.e. 5 years of the plan. Investors can also open a POMIS account, whether independently or in joint. No tax rebate is provided under this scheme either on the maturity amount or the investments.

13. ULIPs (Unit Linked Insurance Plans)

ULIPs plan offers the dual benefit of insurance and investment. Moreover, exempted tax with a lock-in period of 3 to 5 years makes this plan the best investment option. Under ULIP, an investor’s semi-premium is used for insurance coverage and an investor’s other semi-premium is used for market-linked instruments such as shares, bonds, etc. Investors need to pay a premium at the pre-defined time only in which they get the benefits for the complete policy period. It’s a long-term investment with maximum ROI which lets investors get tax-free maturity. Flexibility investment in ULIP helps the investor to choose as per their risk appetite.

14. Liquid Funds

Looking for a short-term investment where you can withdraw your money anytime as per your need? Liquid funds are like stock market investments where your money will be invested in government bonds and securities which offer a higher interest rate of 7%.

15. National Savings Certificate (NSC)

The NSC is a government-backed fixed income investment scheme that is a risk-free investment that can be readily bought at Indian public banks, some private banks, and all post offices. It can be started with a minimum of Rs 1000 whose interest compounds annually at the rate announced by the Ministry of Finance every quarter but will be paid at the end of the maturity period. You can invest any amount in the multiple of 100 in 12 installments in one financial year or the desired deposit at once. NSC has a lock-in period of 5 years and premature withdrawal is only possible in cases of passing away of the certificate holder. Exempt on Investment up to Rs. 1.5 Lakh per annum under Section 80C of the Income Tax Act. Interest every year is considered as reinvestment and not taxed; but eventually, some interest will be taxed as per your regular tax slab.

16. Fixed Maturity Plans

The objective of a fixed maturity plan is to provide a constant return after some time. The fixed maturity plans hold in the security until maturity and remain uninfluenced by the interest rate even if market conditions get volatile.

17. Post-Office Term Deposits

The objective of Post-office Term Deposits (POTD) is to provide an assured return on the deposit as per the duration investors chose. There is no risk associated with POTD investment. It is more likely bank fixed deposits where investors save money for a fixed period. POTD provides an interest rate of 5.5 to 6.7 percent, depending on the tenure of the deposit. Interest is paid annually but calculated quarterly.

18. Recurring Deposits

Recurring Deposits offer a rate of interest of 5.8% for 5 years. Premature withdrawal is available after 3 years. Yes, Income tax benefits are also available under section 80c.

19. Post-Office Time Deposits

Post-Office Time Deposits offer a rate of interest of 5.5 to 6.7 percent whose tenure range is 1 to 5 years. Premature withdrawal is available after 6 months.

20. Savings Account

Savings Account investment option offers an interest rate of 4% carries maximum liquidity and is most preferable as there are no hassles and anytime from anywhere investors can withdraw funds.

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