Top Investment Options In India 2019 with Complete Guide

Investments play a key role in finance management. It proves to be an efficient saving technique but an aggressive one. Investments are made with the hope of availing higher benefits in the future. Profits are either in the form of capital appreciation, interest earned or dividend. Given below are the types of investment, the importance of investment, and some tips for saving money.

Types of Investment

There are two broad categories of investments:  traditional and alternative investments. Most of the popular investment options come under conventional investments. These include real estates, shares, bonds, stocks, mutual fund and fixed deposit.

The main objective of alternative investments is to acquire matters with the expectation of getting high returns in the future. Some of the famous alternative investments are hedge funds, venture capital, private equity, and collectable items.

Top Investment Options

Although there are many investment option as described above, only a few are the top and most preferred ones. Given below are some details of the best investment options.

Mutual fund

Mutual funds are one of the top Investment options in India. Equity funds are famous among mutual funds due to its earning potential. But with high rewards come high risks, and therefore investors usually consult financial advisors before making any decision. One can start investing with as little as Rs.500 monthly with SIPs (Systematic Investment Plan).

Fixed Deposits

Fixed deposits are considered to be the best investment option for those who do not want to take any risks. A fixed amount of money is kept safely in a financial institution and interest is earned through it. One can withdraw the money at the maturity. There are several type of FD schemes offering higher rate of interest.

Fixed deposit is a highly stable investment vehicle offering the benefits of wealth accumulation and creation of corpus. For which FD interest rate prove to be the right investment vehicle for growth.

Real Estates

Real estates have seen a boost with the industry providing ample safety measures to the buyer as well as the seller. This type of investment is suitable for those looking for long-term investment and with a lot of money. What has given an extra boost to this industry is the availability of easy home loans.

Stock

Investors can track and monitor the performance of stock in real time. For those who wish to invest less due to the risk, there are various small, mid and large cap stocks options provided. This way one can generate income and balance the portfolio even with small contributions.

Bond

Bonds are issued by public and private sector enterprises to raise a huge sum of money. The sector issues these bonds in the public market. Investors can buy them and sell them in the future at a higher rate. The rate is prefixed for a certain period.

Gold

Buying precious material has been a popular investment option in the country for decades. Smart investors buy gold when the prices drop and sell it when it is the costliest in the market.

Public Provident Fund

PPF is risk-free and extremely easy to apply for. Individuals can open an account in a bank or even in a post office with a tenure of 15 years. The interest earned through PPF is free from taxation, and one can also avail the loan in it. PPF is ideal for salaried people.

Kisan Vikas Patra

KVP doubles a one-time investment in a period of 108 months to 118 months. This is a scheme from the Indian post office. It has a minimum investment requirement of Rs.1,000 with no upper limit for this investment.

Voluntary Provident Fund

An employee can voluntarily contribute any percentage of the salary to PF account. But, the employer is obligated to contribute any amount toward VPF. The contribution here must be more than the Employee Provident Fund.

Employee Provident Fund

Employees can save a fraction of their salary for a stable future. This is mandatory for employees working in organizations registered under the EPFO. The employer contributes to it as well.

National Pension System

NPS is backed by the government and has a low-risk profile. Investors receive a certain amount of pension regardless of the contribution made. One can avail tax benefits and save up to Rs.1.5 lakh annually. Moreover, individuals with high tax brackets can structure their salary in a way that their employer contributes 10% of the salary to NPS.

Senior Citizen Saving Scheme

Senior citizens can avail this scheme by opening an account at the bank or post office.  This is a good scheme for senior citizens but comes with no tax benefits.

Senior Citizen Fixed Deposit Scheme

Being a low-maintenance scheme, fixed deposit works great for senior citizens. They let them earn slightly higher income than regular deposits across various maturity periods. The senior citizen fixed deposit scheme are ideal for investors looking for assured returns with low-risk.

Recurring Deposit

Investors can deposit a fixed amount every month into their RD account and earn interest rates which apply to FDs. RDs are a viable option when one does not have a lump sum to invest but can save a defined amount from the income every month.

Importance of Investment

Investments are as important as savings, in fact, more vital than savings. Given below are some reasons to invest.

Grow the Capital: While, saving ensures that the money is safe, investments help this capital to grow instead of just lying in the account.

Earn income: Investment options allow investors to earn from the accumulated wealth.

Emergencies: The returns from investments can be utilized during emergencies such as medical expenditures.

Set Goals: Be it long-term or short-term; investments help investors plan out financial goals effectively.  

Tax Reduction: There are certain investment options which allow individuals to reduce tax.

Security: Lastly, investments provide financial protection for the entire family. Moreover, investors can fight inflation by investing in the right instruments.

How to Invest

Questions on how and where to invest can be answered depending upon the earning and spending of the investor. Therefore, tips for Investment given to one person differ from another. The investor must analyse the fund and find out the financial goals to know which is the best investment option.

It is essential to research about the investment options and the bank policies thoroughly to understand which is the best investment option. Many have grown tremendously with regards to finance by investing smartly.