What is Investment and What is Its Purpose?

Different people possess different notions and understanding of “investment”. To start with, first of all, let’s try to get a clear understanding of what is investment and how it can be useful for the folks. Investment is an act of buying assets or items that help you generate income in the long run. Economically, it can be defined as the act of purchasing assets or goods that won’t be consumed today but will be used to create wealth in future. While in financial aspects, one can define investment as an act of buying monetary assets in order to receive income from it in future or selling it later at a higher price for profit.

Investment plans

Generate wealths Earn 1 Cr^# in maturity with Zero LTCG tax^¶
Double tax savings^ On premiums (under 80C) and on maturity (under 10(10D)
Compare & Choose 30+ Plans and 150+ Fund options

We are rated⁺⁺

17.3 Crore

Registered Consumer

Insurance Partners

7.7 Crore

Policies Sold

In-Built life cover

Invest ₹10K/month & Get

₹1 Crore Tax-Free

Plans starting from ₹1,000/month

Your Name

+91

Mobile Number

Your personal information is secure with us

By continuing you agree to receive assistance and agree to our Privacy Policy, Terms of Use & +Disclaimers

To elaborate the concept of ‘what is investment’ from financial point of view, it means that the investor invests or commits his money or cash in either security, financial assets or in bond issued by the government or the financial institutions with a hope to accumulate more cash in their account.

Investing money in a bond or equity not only brings a lump sum amount to the pocket of the investors but it also assists the government to expand its on-going projects. This is one of the primary reasons the government encourage and people choose this investment option.

There are different types of investment plans that a consumer can go for. However, before getting into details of different products of investment, it is essential to understand that there are basically two types of investment products: i) non-finanacial and ii) financial assets.

Non-financial assets are the most preferred among most of the people. Real estate and gold investments are few examples of non-financial assets. On the other hand, financial assets are further divided into a) fixed income products and b) market-linked products. here, bank fixed deposit and Public Provident Fund are fixed income products; whereas, mutual funds and stocks are market-linked products.

Here are the best investment avenues Indian people can look into in order to meet their financial goals:

RBI Taxable Bonds

The government has come up with 7.75% savings taxable bonds. This bond replaced the previous 8% savings taxable bonds 2003. As per the rule of RBI, the tenure of these bonds is 7 years. In general, the bond is issued by RBI in the format of demat and accredited to the BLA (Bond Ledger Account) of the consumer or the investor. Furthermore, a Certificate of Holding is provided to the consumer/investor as proof of the investment.

Senior Citizen Savings Scheme (SCSS)

Those who are looking forward to create a substantial financial corpus for their retirement, often choose to take up this option. As the name indicates, only senior citizen can open and invest in this scheme. Those who are above 60 can avail the benefit of this scheme.

They can either avail this saving scheme from post office or public banks. The tenure of this scheme is 5 years. Once it matures it can further be extended to 3 more years. In the present scenario, the interest rate of this scheme is 8.3% per year. This is fully taxable and quarterly payable. One person can open only one account and the maximum investment limit is 1.5 lakhs.

Public Provident fund (PPF)

PPF is still one of the most popular investment options across the country. there is a huge lot of people who still prefer to invest the money in this fund. The tenure of the scheme is 15 years. This is a tax saving investments avenue and the interest rate offered is also reasonable.

Bank Fixed Deposit

In India, fixed deposit is still considered as the safest investment choice among people. According to the rules of the Credit Guarantee Corporation and Deposit Insurance, each depositor has insured up to Rs 1 lakh for both principal and interest. One can easily choose for either yearly, half yearly, quarterly or monthly interest option.

Final Thoughts

Going through the aforementioned facts, it would be easier for you to relate to what is investment and how it brings hopes of gaining higher amount to the investors. These investment options are inferred as the best investment options among the common folks of the country. However, it’s always advisable to consult with financial advisors before going ahead with any investment plan as proper guidance and advice can lead one investor to right path of investment.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer. Tax benefit is subject to changes in tax laws. *Standard T&C Appl

Invest More Get More!

You Get

₹1 Crores*

You Invest

₹10K/month

You Get

₹80 Lakhs*

You Invest

₹8K/month

You Get

₹50 Lakhs*

You Invest

₹5K/month

Calculators

Show More Calculator

Investment Calculator

One time
Monthly

Amount I wish to invest ₹

Invest for (Years)

Stay invested for (Years)

Expected rate of return (in %) / Year

Sensex has given 10% return from 2010 - 2020

You invest

You get

View plans

Investment plans Articles

Popular Articles

IPPB Premium Sampoorna Savings Account

29 Oct 2026

The IPPB Premium Sampoorna Savings Account is a

IPPB Premium Surakshit Savings Account

29 Oct 2026

The IPPB Premium Surakshit Savings Account is a

IPPB Aadhaar Mobile Number Update Online

29 Sep 2026

While full online updates aren't possible due to mandatory UIDAI

Gruha Lakshmi Scheme

25 Sep 2026

The Gruha Lakshmi Scheme or Gruha Lakshmi Yojana is a flagship

Mahila Rojgar Yojana

28 Jul 2026

Mukhyamantri Mahila Rojgar Yojana is a scheme launched by the

How to Check CIBIL Score

07 Nov 2025
161458

Checking your CIBIL Score is a simple process that gives you instant insight into your financial health and

IPPB Aadhaar Mobile Number Update Online

29 Sep 2026
3734

While full online updates aren't possible due to mandatory UIDAI biometric verification, India Post Payments Bank

Compound Interest Calculator

17 Nov 2021
86380

A compound interest calculator helps determine the future value of an investment based on regular compounding. By

IPPB Customer ID

21 Aug 2025
23770

You can easily find your IPPB Customer ID by sending an SMS “GETCIF DDMMYYYY” to 9910228664 from your

IPPB KYC Online

14 Oct 2025
16787

For managing your India Post Payments Bank (IPPB) account, you can set up the basic details on the IPPB mobile

˜The insurers/plans mentioned are arranged in order of highest to lowest first year premium (sum of individual single premium and individual non-single premium) offered by Policybazaar’s insurer partners offering life insurance investment plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI. Policybazaar Insurance Brokers Private Limited does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Past 10 Years' annualised returns as on 01-11-2026

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).