Where to Invest Money in India for Higher Returns?
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Updated date : 26 February 2020
Investment plans with Higher Returns
In today’s day and age, it is very important to create a secured financial cushion for the future. Creating a foolproof financial backup is not an easy task to do. However, one of the best ways to do so is to make smart investment plans. Thus, in order to make the right investment plan, one needs to identify the asset, evaluate whether it matches with the personal goal and then create a strategy to generate good returns.
In order to make your task of investment planning more easier, here we have listed some of the best plans of investment in India for higher returns.
Unit Linked Insurance Plans (ULIP)
Unit linked insurance plan provides the combined benefit of insurance cum investment to the individual. Along with the benefit of life protection, it also works as a lucrative investment opportunity. In a ULIP plan, a portion of the money is kept for protection whereas the other half of the money is invested in market-linked instruments such as equity, debt, bond, stocks, etc.
ULIP plans provide the benefit of flexibility of investment to the investors as it is normally linked to the capital market. Depending on one’s own risk appetite, an individual can choose to invest in debt or equity market. Along with the benefit of flexibility, high returns on investment and insurance coverage, it also works as a tax-saving instrument. The premium paid towards the ULIP plan and the maturity proceeds are tax exempted under section 80C and 10(10D) of Income Tax Act.
Fixed deposit is one of the safest and best investment options available in the market. The rate of interest offered by this scheme is fixed and ranges from 4-11% yearly. The tenure of the policy ranges from 10days to 10 years. However, the money invested in the fixed deposit cannot be withdrawn before the maturity period. After the3months of the deposited amount, the interest is paid to the customer. Moreover, the fixed deposit also provides tax benefit under section 80C of the Income Tax Act. But, while making premature withdrawals the investors should keep in mind that it may cost some penalty.
Another trustworthy and safest mode of investment is a saving account. Saving account is best for liquidity and one cam opens it with any bank or financial institution and keeps the money in saving account till required. 4-7% of interest rate is offered by bank depending upon the duration and the amount of money is kept in a savings account.
If you are looking forward to investing in short term investment plans then investing in gold is considered to be the wisest option. Gold investment has many benefits as it provides stability and protection during the bank crisis and can also be helpful to deal with inflation and social unrest. Besides this, the major advantage of investing in gold is that the rise in prices in the financial market does not affect the value of gold. Over the past few years, gold investment has offered phenomenal return on investment i.e. 23.5% and has proved to be one of the best short term investment options available in the market.
This is one of the most effective and reliable investment plans. One can open a recurring bank deposit account with the postal department or any bank. The tenure of opening a recurring deposit account ranges from 6 months to 10 years. This option is suitable for those investors who want to invest a small amount in monthly instalments into the account. However, the interest amount received under recurring deposit is not tax-deductible.
Debt Mutual Fund
If you have a moderate risk appetite and you are looking forward to investing money with an objective to gain regular returns debt mutual fund can prove to be the best choice. Under this mutual fund, the money is invested in short term government securities, money market instruments and corporate securities. Debt fund provides an estimated return of 5-8% and best suited for those investors who have a high risk appetite. This is one of the best short term investment options that provide a steady way to make some smart money within a shorter span of time.
Public Provident Fund
It is the long-term and most secure investment product among the various other options available for you. PPF is tax-free. Anybody can invest in PPF and for that, you will have to open an account in the bank or post office the amount for a lock period of 15 years. Over the years, you can earn compound interest from the PPF account. If you want you may extend the time frame for a more five years. However, there is drawback according to which; you are allowed to take back your investment by the end of 6th year. You may also take a loan on the PPF account balance.
Real Estate Investment
Real estate is one of the fastest-growing industries in today’s scenario. Big projects like housing, manufacturing, commercial, retail, hospitality, etc., are some of the examples in this realm. Buying a plot or a flat is one of the best investment options these days. Besides, the risk in investing in property is hugely lower as the rate of property tends to enhance within 6 months. Moreover, one can also gain rental from real estate property. Real estate Investment done can earn a profit in two ways i.e. by capital appreciation and rental. However, real estate investment offers less liquidity as compared to different asset classes.
Share purchase or Direct Equity-
Before you contemplate to buy share or equity, try and analyze a share stock. It is notched as one of the best options among the list of investment plans for a long period of time. Remember this that if your investment is for a long period of time, say for more than 10 years then it is surely going to yield a higher rate of return.
Are you looking for a balance between the risk that you take and the return that you earn? Therefore, in that case, you may invest in bonds or equities, that is, in mutual funds. Nowadays, the trend is to invest in stock markets via a mutual fund. It supports a systematic investment plan for a long time. Rest assured this kind of investment will yield a much higher return in comparison to other investment plans in the market.
Equity Linked Savings Scheme (ELSS)
Equity-linked savings scheme are tax saving investment option, which offers the benefit of the market return. ELSS fund comes with a lock-in period of 3 years and can be converted into the open-ended scheme after the completion of 3 years. Under this fund option, around 60% of the investment is made in equity and equity-related securities. Along with the benefit of high investment returns the investment made in the ELSS up to the maximum limit of Rs.1.5 lakhs are applicable for tax exemption U/S 80Cof Income Tax Act.
Wrapping it Up!
The above list shows you the different types of investment plans that are available for you. You need to choose the right option after assessing the pros and cons of each option. While choosing the investment option it is important to know that the investment option which suits others might not be beneficial for you. While every individual has their own financial goals, choosing the right investment option should be based on the investment horizon and investment goals of the individual. You may consult with a financial advisor in order to determine the investment plans that you should go for.
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