Investment is putting in your hard-earned money to buy assets that will eventually increase in value over a period of time and offer great returns. There are many kinds of investments available in the market in which the investors can put their money. But how to decide which investment is best suited for them?
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It is important to note that, an investor needs to understand their appetite before investing in any kind of investment plan or scheme. Here are the top 4 types of investments that rarely disappoint the investor, if invested wisely.
Investment is creating an extra cushioning of income that will help you secure your retirement as well as during any financial crisis. In today’s world, apart from your regular income and savings, it is extremely necessary to make some extra investments to secure the future of yourself and your family. Investments should be made wisely keeping in mind future requirements and only after the in-depth knowledge of the product you are going to invest in. All kinds of investments are available in the market, so it is necessary to choose what is best for you.
Unit Link Investment Plans or ULIPs serve 2 purposes in a single purchase, that is, investment and insurance. The main purpose behind ULIP is to offer their investors life cover along with the opportunity to create wealth. ULIPs are one of the best kind of investment these days as it lets the investor achieve life goals systematically.
Parameters |
Unit Linked Investment Plans |
Type of Instrument |
Return on investment + Insurance coverage benefit |
Investment Type |
Investment of funds to be made in the equity market, debt market, or both |
Tax Benefit |
Under Section 80C and 10(10D) of the Income Tax Act, 1961 |
Switching Option |
A limited number of switches are available |
Life Cover |
Available for the family of the investor |
Lock-in Period |
Yes, it has a 5 year lock-in period |
Investment Regulated By |
IRDAI |
Death Benefit |
Yes, paid to the nominee in case of untimely demise |
Fund Management Charges |
1.35% |
Systematic Investment Plans or SIPs, as the name suggests, are a way of systematically investing in your future. In a SIP, the investor invests a small amount regularly which helps in saving a good amount in the long run along with inculcation of a habit of investing regularly.
Some of the top reasons why an investor, be it new to investing or old, should go for SIPs as their investment option:
SIP investments are pocket-friendly as small and regular investments are required to carry forward the SIP investment. Generally, the minimum amount for a SIP is Rs. 500 and can be Rs. 100 for selective SIPs as well. A low amount of investment makes it purchasable for all classes of society.
One can invest in more than 1 SIP at a time. An investor can opt for multiple SIPs at a time which increases the probability of future gains rather than putting all their money in just 1. It is important to keep in mind that even the division of money should be made wisely for better future results.
An investor can opt in and out of a SIP anytime they want to, making SIPs flexible in nature. Note that some companies charge a 1% exit load if opted out before 1 year.
Fund Name |
Monthly Investment |
1 Year Returns |
3 years Return |
5 years Return |
Axis Bluechip Fund |
5000 |
52.52% |
20.79% |
18.16% |
Axis Focused 25 Fund |
5000 |
61.91% |
20.94% |
19.03% |
DSP Equity Fund |
5000 |
31.90% |
14.69% |
14.36% |
Franklin India Focused equity Fund |
5000 |
80.39% |
22.68% |
15.78% |
HDFC Balance Advantage Fund |
5000 |
55.65% |
14.39% |
13.47% |
ICICI Prudential Bluechip Fund |
5000 |
59.24% |
19.41% |
15.69% |
Kotak Standard Multicap Fund |
5000 |
48.94% |
14.15% |
12.51% |
Motilal Oswal Focused 25 Fund |
5000 |
40.77% |
20.01% |
14.34% |
Nippon India large Cap Fund |
5000 |
69.69% |
15.55% |
14.48% |
TATA India Consumer Fund |
5000 |
49.09% |
26.81% |
19.06% |
Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer. The tax benefit is subject to changes in tax laws. *Standard T&C Apply
One of the most popular investment schemes, the Public Provident Fund (PPF) is famous for its flexible nature. A famous savings plus investment plan, PPF was launched with the aim to promote small investments by providing reasonable returns.
Currently, the interest rate of PPF is 7.1% and it offers a tax exemption of up to Rs. 1.5 lakhs per annum.
Parameters |
Public Provident Fund |
Rate of Interest |
7.1% (Q1 FY 2021-22) |
Age of Entry |
15 Years |
Entry Amount Paid |
Rs.100/- |
Minimum Deposit |
Rs.500/- |
Maximum Deposit |
Rs.1,50,000/- |
Tax Benefit |
Rs.1,50,000/- |
Maturity |
15 years |
Premature Cancellation |
After 5 financial years |
Nomination |
Yes |
Loan |
Yes |
Public Provident Fund account can be opened by any Indian resident above the age of 18
The account can be opened on behalf of minor as well
PPF account can be operational online as well
Premature withdrawals can be made but with some regulations
Aadhar card needs to be linked with the bank account to open a PPF account
It comes with a lock-in period of 15 years
Partial withdrawals can be made starting from the 7th year
National Pension Scheme, launched by the Government of India is administered and regulated under the (PFRDA) Pension Fund Regulatory and Development Authority. NPS is one of the best government-backed schemes that create a financial corpus for investors even after retirement. An individual between the age of 18 years to 60 years can opt for the National Pension Scheme Account.
There are 2 types of accounts an investor can opt for under the National Pension Scheme:
National Pension Scheme |
||
Tier I |
Tier II |
|
Eligibility |
Any Indian citizen between 18 & 65 years of age |
Members of Tier-I only |
Lock-in Period |
Till the age of 60 years |
NIL |
Minimum deposits to be made in a year |
1 |
Not necessary to deposit yearly |
Minimum opening account balance |
Rs 500 |
Rs 1,000 |
Minimum contribution |
Rs 500 |
Rs 250 |
Minimum amount deposited every year |
Rs. 6000 |
NIL |
Fund management charge |
Same as Tier-II |
Same as Tier-I |
Tax benefits |
Tax exemption of Rs. 1.5 lakhs under Section 80CCD (1) |
No tax benefit |
Up to Rs.50,000 as deductions are allowed under Section 80CCD 1(B) |
There is a famous quote by an American economist Benjamin Graham that says, “The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.”
Every investor should study the market as well as understand their appetite clearly before making any future investments.
Invest wisely!
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