Investment is one of the best ways through which you can grow your hard-earned money. It is like watering your plants, you nurture them and see them grow. As the economy is growing in India, more and more people are starting to invest their money.
There are several investment sources available in the country such asULIP, Gold ETFs, Bonds, and a lot more. However, with the growing number of choices, it becomes complex to find a suitable investment avenue that offers good returns.
Investing is something that has to be planned strategically because you can’t alter your decision once you invest your money in the wrong thing. With that said, this blog post discusses some of the best investment options in India that help you grow your capital exponentially.
Unit Linked Insurance Plans (ULIP)
Investment in unit-linked insurance plans is one of the best options for Indians because they provide both investment and insurance benefits. These plans are tax-exempt and include a lock-in period that ranges from 3 to 5 years.
Some of the premium you pay under a ULIP is used to pay for insurance. The remainder is invested in market instruments like shares and bonds which give you exposure to the stock and bond markets and allows you to enjoy capital gains on your investment.
There are numerous benefits of ULIP such as flexibility to invest as per your risk appetite. This is a long-term investment and helps you reap maximum returns. Also, you can avail of tax-free maturity proceeds under the ULIP scheme.
Mutual funds are a commonly-used investment option in India. Unlike most other investment options, the return on investment in mutual funds is linked to the performance of financial instruments like stocks, bonds, debt, and so on.
These have a higher risk as compared to other investments as market conditions can fluctuate and result in a significant loss of capital. However, they offer a higher return on your invested capital as compared to other best investment options.
There are different types of mutual funds such as equity, debt, hybrid, solution-oriented schemes, index funds and fund of fund schemes. Your financial goals and risk profile should dictate which mutual fund you should pick.
Stocks are a popular investment because they have historically delivered higher returns compared to other asset classes. However, this doesn’t mean that they are guaranteed to be profitable or that it’s easy to pick the right stock or time entry and exit.
While there is risk involved, you can limit losses by using stop-loss. You can diversify across sectors and market capitalizations to reduce risk. An investor needs to open a Demat account (a share trading account) to directly invest in equity-linked financial instruments.
Real estate is a good investment option for those who can afford it. It’s also a good long-term investment as the Real Estate Regulation and Development Act (RERA), which came into force in 2016, has further boosted the real estate industry in terms of transparency.
The government has established regulations to ensure the buyer’s safety. With the booming market for real estate, even the demand has increased. Moreover, the availability of tax rebates on home loans has made it even more attractive.
Over the years, investment in gold has given returns that consistently beat inflation while also providing diversification. By directly buying gold or through a mutual fund or ETF, you gain the advantage of having some gold without having to worry about storing it.
You can invest in the Sovereign Gold Bond Scheme as well. Established by the government, this scheme offers certificates of gold in multiples of the gold gram. The amount of your investment will be based on how much gold you want to own.
Initial Public Offerings
The Initial Public Offering (IPO) is the opportunity for members of the public to invest in a company before it becomes listed on an exchange. The price is low at the time of the IPO, but it will increase when the company is listed officially on the exchange.
When a company is listed on the stock exchange, the price of the stocks depends upon a wide range of factors, including general economic conditions and how all the parts of the company perform. Therefore, make sure you do proper research before investing in an IPO.
If you can figure out how to invest in a growing company that has a high chance of succeeding, then the money you pay for the IPO could be considered a good investment over time.
Bank Fixed Deposits
Fixed deposits are exceptionally well known fixed-pay investment options. Compared with different investment methods like ULIP, FD offers fixed returns over the length of the investment. The profits are payable monthly, quarterly or annually, according to your bank’s rules.
Depending on the bank, fixed deposit investment options range from cumulative to non-cumulative. The cumulative option automatically collects interest over time, while the non-cumulative option (used more often) collects interest on maturity.
If you make an investment in a fixed deposit, there’s nothing more for you to do after you make the initial deposit. You can keep your money safe and watch it grow without any further work on your part at consistent returns. To purchase an FD, you can visit your bank’s nearest branch and get started.
There are many investment options available in India that can help you grow money. With so many investment options available in India, it can be difficult to know which option is right for you. In this article, we’ve discussed some of the more popular and effective options that you can take advantage of including equity mutual funds, gold ETFs and ULIPs. We hope these tips have been helpful!