1. Mutual Funds
While mutual funds are vulnerable to market risk, one should assess the risk before investing. If you understand the market and its hazards, mutual funds can be your greatest investment option for multiplying your money. You can create an investment portfolio based on your preferences, whether you are looking for short-term or long-term investments.
Monthly systematic investment plans or systematic withdrawal plans can be good investing options if you have a low risk tolerance and desire a fixed income from mutual funds. It can also be a good option if you want to make a high-return investment in India.
2. Recurring Deposits (RD) and Fixed Deposits (FD) (RD)
Fixed Deposits (FD) and Recurring Deposits (RD) have stayed popular investments among many investors, particularly those seeking assured returns with little risk. Accounts for FDs and RDs can be easily opened with main banks, non-banking financial companies (NBFCs), and the post office. The following are some of the key characteristics that make FD and RD a popular investment option for 2022:
Minimal risk to investment capital
Amount of flexible investment
In an emergency, you can loan against your FD.
Simple renewal and withdrawal procedure
Just like individuals, companies and government bodies need fund for infrastructural development and social programs, for which they issue bonds to the public markets. The interested investors then buy the bonds to help these entities raise money.
In other words, bonds are fixed-income investment options that cover the loan made by an investor to a corporate or governmental borrower.
What makes them one of the best investment plan in India is that the terms for fixed interest payment, loan principal, and tenure are all included in the bond details. Hence, it assures you of the safety of your investment along with an additional return.
Also, bond prices are inversely proportional to the offered interest rates. It means that these price fall when interest rates increase and vice versa.
4. Direct Equity
One of the first things you should figure out is whether you are looking for long term or short term investments. Direct equity investing is one of the best investment options for long term purpose. It is about the equity shares of a company, which binds you in legal terms related to the company ownership.
By buying a company’s shares, you also get the right to get involved in company meetings and have your say on the company’s decisions. Also, you get the profits as distribution in proportion to your shareholding in the company.
As an investor, you must know that a company’s performance has an impact on the share price, both positive and negative. Depending on the market conditions and your risk appetite, you can also choose to give up the shares back later either to the company or a third party.
5. Post Office Saving Schemes
These are deposit avenues for investors made available by India Post, the body that controls postal chain in the nation. This investment option was once introduced to help people inculcate the habit of disciplined savings in life while also providing investment avenues to aid in financial planning.
Saving schemes that fall under post office investments include:
Monthly Income Scheme Account (MIS)
Post Office Savings Account
Post Office Time Deposit Account (TD)
5-year Recurring Deposit Account (RD), and many others
6. National Pension Scheme (NPS)
The National Pension System (NPS), sometimes known as the National Pension Scheme, was created to replace the pension plans for state and federal government employees. However, beginning May 1, 2009, NPS investments were made available to all Indian nationals. NPS investments can be made into two types of accounts: Tier 1 and Tier 2. According to current regulations, only NPS Tier 1 accounts provide tax benefits and are required. The Tier 2 NPS account is voluntary and has no tax advantages.
7. Liquid Funds
Liquid funds are like stock market investments, wherein money is invested in government bonds and securities. Since there is no lock-in period, it allows you to withdraw money as per your requirement; thereby making it one of the best investment options in the market.
When it comes to short term investments, liquid funds are the one of the best investment options in India. You can invest in it for 3-5 years and withdraw money as per your requirement for fulfilling your short term goals. They are less subject to market risks than mutual funds, which also makes it one of the best investment options.
Unit Linked Insurance Plan is another investment option for people who seek market-linked earnings as well as insurance (ULIP). You can purchase life insurance, which allows you to invest in various funds while also providing you with a life insurance choice. The ULIP has evolved into one of the top investment plans in India.
This top investment option in India provides the benefits of both insurance and market investments, allowing you to develop your money in a systematic manner. Depending on whether you choose long-term or short-term investing alternatives, you can select the most appropriate policy duration. Furthermore, ULIP provides tax benefits under Section 80C of the Income Tax Act of 1961.