Best Investment Options in India
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Best Investment Options in India

When it comes to the best investment options in India, a lot of questions pop up in the mind of people..

Best Investments options in India

If you are wondering why do people invest, the answer is very simple. Some people invest because they need financial security and some invest to accomplish their investment goals.

After the aforementioned question, the next question that pops in the mind of a majority of potential investors is- What are the best investment options to attain financial security? Well, (out of many investment options) the best investment option allow the investor to accomplish their investment goals.

Some people think if they need more money they need to work more. But will that money be any good if they won’t have the time to enjoy it?

Certainly not. By investing your money in the right direction, you not only value your hard-earned money but also create scope for it to grow. Of course, investing in the right avenues is important.

By making an investment in the best investment options in India, you can not only achieve your financial goals but can also create a financial cushion for future in order to live a secured life. This is the reason why investors are always in search of top investment plans where they can multiply their money as per their risk-appetite. The thing to keep in mind is that there are no such investment options that offer high returns with low risk. The risk and returns are directly proportionate to each other. It means, higher the risk, higher the returns and vice versa. So, before zeroing in on any of the investment options, it important to match the risk associated with the product with your risk profile. With the best investment options in India, you can make the best use of your money to maximize your earning potential.

Top Investment Options with High Returns in India

  • ULIP Plans
  • Public Provident Fund
  • Mutual Funds/SIP Plans
  • Bank Fixed Deposits (Return rates varies from Bank to Bank)
  • National Pension Scheme (NPS)
  • Senior Citizens Savings Scheme (SCSS)
  • Direct Equity
  • Real Estate Investment
  • RBI Taxable Bonds
  • Gold ETF 

Investment Options


Maximum Amount

Minimum Amount

Investment Period


Unit Linked Insurance Plans

Market Risk

No Limit

1,00,000/-  for plans 45 years and below

45 Years or below

21.22 %

Public Provident Fund

No Risk

1,50,000/ - (One FY)

500/- (One FY)

15 Years

7.9 %

Mutual Fund (SIP)


No Limit

As low as 500

Only applicable in case of close-ended and ELSS schemes


Bank fixed deposit (FD)


No Limit

Rs. 1000

7 days


National Pension System (NPS)


No Limit

No limit

Variable; until the age of 60


Senior Citizens' Saving Scheme (SCSS)

No Risk

Rs 15 Lakhs

No limit

5 years

8.7 %

Direct Equity


No Limit

No Limit

Can be sold anytime


Real Estate Investment


No Limit

No Limit

Not Applicable in this case.


RBI Taxable Bonds

No Risk

No Limit

Rs. 100

7 years

7.75 %

Gold ETF


No Limit


Not Applicable in this case.


Disclaimer- The investment options mentioned above are in no particular order. The investor can opt for investment options as per their own preference.

 Here is a look at best 10 investment options in details the Indians look at while the savings for their financial needs.

Unit Linked Insurance Plan (ULIP)

Unit-linked insurance plans are considered as one of the best investment options in India. The ULIP plans offer the dual benefit of insurance and investment. Moreover, ULIP plans also offer the benefit of tax exemption. ULIP plans come with a lock-in period of 3 years-5 years. Under ULIP, a part of the premium is used for insurance coverage whereas the remaining premium is invested in market-linked instruments such as shares, bonds, etc.

Top 5 ULIP Plans 

Insurer & ULIP Name

Fund  Name

3 years Return

5 years Return

7 years Return

Maturity value (Premium- 5k per-month)

Bajaj Allianz Goal Assure

Pure Stock




53.6 Lakhs

Edelweiss Tokyo Wealth gain+

Equity Top 250 Fund




55.8 Lakhs

HDFC Click 2 Wealth

Opportunities Fund




48.6 Lakhs

SBI Life e-Wealth Insurance

Equity Fund




45.4 Lakhs

ICICI Signature

Multi Cap Growth Fund




42.3 lakhs

For the above mentioned table we have taken the:

                  • Pay term-20 years
                  • Policy Term-20 years 

Public Provident Fund

It is one of the safest and most secure long-term investment options amongst the best investment options in India. It is totally tax-free. A PPF account can be opened in a bank or post office. The invested money is locked for the tenure of 15 years. Moreover, in this investment option, you can earn compound interest on the accumulated money. You can also extend the time frame for the next five years. The only drawback of having a PPF account is that you can withdraw the invested money by the end of 6th year. In case you need the money, you can take a loan on the balance of the PPF account.

PPF Interest Rate From 2012 to 2020

Let’s take a look at the interest rates offered by PPF account from the year 2012-2020:

Financial Year

Interest Rate















 **PPF rates represented above are for the last 7 years.

**The interest earned on PPF is tax-free; this makes it one of the best investment options in India.

Mutual Fund Investment Options

One of the most lucrative investment options in India- mutual funds is the best investment plan offering higher returns on investment over a long period of time. It is a market-linked investment option that invests money in various financial instruments such as equity, debt, stocks, money market fund, etc. The returns are generated as per the market performance of the fund. Even though the risk exposure in mutual fund investment is higher, it offers much better returns as compared to other best investment options in the market. The two major investment options offered by mutual funds are:

Equity Mutual Fund

Equity funds are market-linked securities. Being one of the best mutual funds in India, equity mutual funds provide high ROI by investing in shares of companies of different market capitalization. As compared to other investment options in India like debt or fixed deposits, equity mutual funds offer much better returns. However, the risk involved is more.

Under the equity mutual fund scheme, 65 of the asset is invested in equity and equity-related securities and 35 of the asset is invested debt and money market instruments.

Let’s take a look at the top-performing equity mutual fund schemes 2020:

Equity Funds



3rd Year

5th year

Mirae Asset Large Cap Fund



ICICI Prudential Bluechip Fund



Axis Bluechip Fund



SBI Magnum Multicap Fund



SBI Bluechip Fund



Disclaimer- The investment options mentioned above are in no particular order. The investor can opt for investment options as per their own preference.

Debt Mutual Fund

Debt funds are considered one of the best investment options for investors who want to gain a steady ROI. Under debt fund, the investment is made in fixed-interest securities such as government securities, corporate bonds, commercial paper, treasury bills, and other money market instruments. The major objective of investing in debt funds funds is to generate capital appreciation and earn interest income.

Let’s take a look at the top-performing debt mutual fund schemes 2020:

Debt Funds



3rd Year

5th year

Reliance Low Duration Fund



Aditya Birla Sun Life Savings Fund



UTI-ST Income Fund



DSP Credit Risk Fund



HDFC Short Term Debt Fund



Disclaimer- The investment options mentioned above are in no particular order. The investor can opt for investment options as per their own preference.

Bank Fixed Deposits

Fixed deposits are very popular fixed-income investment options. True to its name, FD offers fixed returns over the investment tenure. The returns are payable monthly, quarterly or annually, as per the bank guidelines.

Depending on the bank, FDs offer cumulative and non-cumulative options of investment. In a non-cumulative option, the interest is paid as per underwriting, whereas in the cumulative option, the interest is re-invested and payable at the time of maturity. This makes it one of the best investment options in India.

The investment in fixed deposits can be made online or by visiting any branch of the bank of your choice. The FD interest rates are attractive, ranging from 6.50 (for regular account holders) to over 7 (for senior citizens) for the tenure of 1 year.

FDs offer a range of tenures (minimum - 7 days, maximum - 10 years) and the investors can choose the investment as per their investment horizon. 

National Pension Scheme (NPS)

Being one of the best government-backed investment options, the National Pension Scheme provides pension solutions. The fund invests in equity, bonds, government securities, and investment alternatives as per the investor preference.

It offers two choices- auto and active. Under the auto option, the funds get automatically invested in various assets, whereas the active option enables the investor to invest in assets as per their choice.

The lock-in period depends on the investor’s age, as the scheme only matures when the investor turns 60.

As per this scheme, the accumulated interest is tax-free. If one opts for the lump-sum payment upon maturity, 40 of the maturity proceeds are tax-exempt. If one chooses to receive a pension after maturity, the amount is taxable as regular income.

Senior Citizen Savings Scheme

Senior Citizens' Saving Scheme (SCSS) is one of the risk-free tax saving investment options in India for senior citizens above 60 years. It is one of the best investment options for senior citizens because offers them a regular income. The scheme offers a whopping rate of interest i.e. 8.6 interest per annum, which makes it a highly attractive investment option.

SCSS is available across India through post offices and banks. The maximum amount one can invest in this scheme is Rs. 15 lakhs.

While the tenure of the scheme is 5 years, it can also be extended for 3 years.

Direct Equity

Direct equity is considered as one of the best investment options for a long-term period. Even though most of the investors consider direct equity a high-risk investment options, the returns offered by direct equity funds are higher than any other investment options available in the market.

While investing in direct equity investment plans, it is very important to keep in mind certain aspects such as picking the right stock, time your entry and exit in the market. Before investing in direct equity, make sure you know how to analyze a share stock before investing in it. Currently, the 1 year, 3 years and 5-years market returns are around 8 , 13, and 12.5 respectively. 

Please Note- In order to invest in a direct equity fund, the investors are required to open a Demat account.

Real Estate Investment

One of the fastest growing sectors in India is real estate, holding the huge prospects in major sectors like housing, commercial, hospitality, manufacturing, retail and more. Buying a flat or plot is the best decision amongst the investment options available in India. The risk is very low because the rate of the property increases within 6 months. Real estate investment works as an asset which is considered as one of the best investment plan with high returns over a long term period.

RBI Taxable Bonds

RBI Taxable Bonds have tenure of 7 years and offer an interest rate of 7.75 per annum.

These bonds are issued in Demat mode only and are credited to the Bond Ledger Account (BLA) of the investor.

The bonds are issued at a price of Rs. 100, and as proof of the investment, the investors get a Certificate of Holding.

The interest can be availed as regular income in the non-cumulative option, whereas the cumulative option offers the re-invested interest. This makes these bonds one of the best investment options in India


Gold is one of the oldest, evergreen, and one of the best investment options in India.  It is because of the value of gold increases quickly.

If you are looking for gold investment option you can simply opt for gold deposit scheme, gold ETF, Gold Bar, Gold mutual fund, etc. gold investment can benefit in the short period of time.

Top 5 Indian Gold ETF Schemes with High Returns:

Mutual Fund Scheme

1 Month

3 Month

6 Month

1 Year

2 Year

3 Year

5 Year

Religare Invesco Gold ETF








SBI - ETF Gold
























Axis Gold ETF








Disclaimer- The investment options mentioned above are in no particular order. The investor can opt for investment options as per their own preference.

Types of Investments

Before start making an investment, it is important to have proper knowledge of different investment plans. As most of the investors invest on the basis of their risk level (Low, medium and high risk), let’s take a look at the type of investment options in details.

1. Low-risk investments

These are investment options, which pay fixed income irrespective of the changes in the economy or business. Debentures, bonds and fixed deposits come under this category. Besides this, there are other investments options such as EPF, PPF, Sukanya Samriddhi Yojana, Senior Citizen Savings Schemes and National Savings Certificate which is government initiated schemes and offers low-risk guaranteed returns. The returns offered by these investment schemes are periodic and predetermined.

2. Medium-risk investments

These investment plans include a certain %age of risk but also pay a higher return to the investors. Medium risk investment options are best suited for investors who have a medium risk appetite and who want to gain a regular flow of income.  Balanced mutual fund, debt fund and index fund fall under this category. Even though medium risk investment options have an element of stability and debt, but their market-linked volatility can hamper the principal amount.

3. High-risk investments

In high-risk investment options, the returns and risks are directly proportional to each other.  These investment plans provide a very high return on investment however; the risk associated with investment is also high. Equity mutual funds, stocks of companies, derivatives and even stocks come under this category. High-risk investment options are best suitable for investors who have a high-risk appetite and who want to gain a high return on investment over a long-term period.

What you should do?

Some of the above-mentioned investment options are fixed income options while others are market-linked investment options. While planning to accumulate wealth for the future, it is important to understand the role of both types of investment options.

While market-linked investment options are exposed to the volatility of the market, they generate high ROI, the fixed-income investment options help to accumulated wealth so that you can achieve your financial objectives. In order to achieve your financial goals be it a short-term investment or long-term investment goals, it is very important to make the best use of both the investment options. Keeping in mind the important aspects such as taxation, risk and investment horizon have a judicious mix of investment.



The thumb rule of making a smart investment is to keep a proper understanding of the different types of investment options available in the market. For most of the investors, the purpose of the investment may vary depending in terms of financial objective, time period, risk levels, etc. Thus, in order to make the money grow, it is very important for an individual to invest in smart investment options that can generate lucrative returns in the long-term.

Also, as an investor, you should not get confused between savings and investment. While savings are considered as a passive way of wealth accumulation, contrary to this, smart investment strategies can help you to create more wealth.

Investment Options -FAQs

Q. What are the top 10 investment options available for saving in India?

There is no guarantee of returns but depending upon the market, below are the best options to invest for higher returns in long term.

  • Direct Equity
  • Equity Mutual Funds
  • Debt Mutual Funds
  • SIP and ULIP Funds
  • National Pension System
  • Public Provident Fund
  • Bank Fixed Deposit
  • RBI Taxable Bonds
  • Gold Exchange Trade Funds
  • Real Estate Investment

Q. How is Risk and Return Related?

Risk and returns are directly related. Generally, in any investment, the risk factor increases with the higher potential of ROI.

Q. What is an Asset Allocation?

Asset allocation is an investment strategy. Its main objective is to balance the rewards and risks by distributing the assets of the investor. Asset allocation depends on the duration, risk appetite, and financial goals of the investor. The three major asset classes are fixed income, equities and equivalents and cash. Different asset classes have a different level of returns and risk over a period of time.

Q. What is Diversification?

Diversification is the method of distributing the fund in a way that it balances the risk and minimizes the risk exposure to any specific asset. Under the concept of diversification, the investment is made in different assets in order to reduce the risk or volatility.

Q. What Types of Risks are involved in Investing?

 Here are 9 types of risk:

                                • Market-related risk
                                • Liquidity risk
                                • Concentration risk
                                • Credit risk
                                • Reinvestment risk
                                • Inflation risk
                                • Longevity risk
                                • Horizon risk
                                • Foreign investment risk

Q. What are the steps involved in the Investment Process?

 Here are 5 steps:

                                • Understanding the financial needs
                                • Decision of asset allocation
                                • Strategic portfolio selection
                                • Decision of asset selection
                                • Evaluating the performance of the portfolio

Q. How can I Avoid the Most Frequent Money-Losing Mistakes?

You can avoid the most frequent money-losing mistakes by keeping some important points in mind:

                                • Don’t put all the eggs in one basket
                                • Stop trying to time the market
                                • Set long term financial goals
                                • Start investing through SIP

Note- The aforementioned tips are applicable to all investment options.

Q. What Questions Should I ask Before Making any Investment?

Here are the questions that should be asked before investing in any investment options in India (or any part of the world):

                                • What is your investment goal?
                                • What is your investor's risk appetite?
                                • What is the time frame of investment?
                                • Who are you investing with?
                                • Are you making a diversified investment?

Q. What Investment Hazards Should I Look Out for?

Here are the hazards that one should look out for:

                                • The investors should first evaluate the needs and then make investment accordingly.
                                • The investors should monitor their investment.
                                • The investors should set their long-term financial goals.
                                • The investors should not rely on short cuts in investments.
                                • The investors should invest in a disciplined manner to avail maximum returns.

Q. What Should I Invest my IRA in?

Like any other investment option, you should match the portfolio along with the desired returns, time period and risk tolerance. As IRA (Individual Retirement Arrangement) is a long term investment, the investors should focus on equity funds in order to gain maximum ROI.

Q. What are Derivatives and Options?

Derivatives can be described as the investment options whose value is created on underlying assets like bonds, stocks, currencies, commodities market index and interest rates. Options, on the other hand, are the type of derivative and are a great investment instrument that enhances the investment portfolio of an individual and reduces the risk.

Q. When Should I Start Investing?

In order to gain maximum ROI and to achieve your long term financial goals, you can start investing as early as possible. The longer you stay invested in the market, the more you gain ROI and can create wealth in the long term.

Q. What is the Impact of Taxes on my Investment Returns?

The net profit made on the stock sales share of mutual funds is taxable as a capital gain. The tax benefit is offered on mutual fund ELSS funds under Section 80C of Income Tax Act.