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Smart Investment- 5 Best Investment options in India

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Most investors want a high-return investment policy, where they can grow faster without any risk of losing their money. However, as High returns and low risk are inversely related, hence it is difficult to find an investment plan that provides high returns and low risk. So, in the process of selecting any particular Investment plan, one has to cross-check the risk profile of the selected Investment plan.

There are two categories that various investments fall into- Financial and Non-financial assets. Financial assets can be subdivided into market-linked products (like stocks and mutual funds) and fixed income products (like Public Provident Fund, bank fixed deposits). Non-financial assets can be in the form of Gold or Real Estate.

Top five Investment Options in financial assets are mentioned below, which Indians can consider as the Smart Investment options—

1. Public Provident Fund (PPF)

This is the investment plan that most of the people turn to since the PPF offers a long tenure of 15 years, which is beneficial to most people. In PPF, the impact of compounding of tax-free interest is huge, which gets bigger in the later years. Moreover, since the interest earned and the principal invested is backed by Sovereign Guarantee, it ensures a safe investment and therefore gained the trust of the people. The interest rate on PPF is set by the Government every quarter based on the yield of Government securities. Under this Investment plan, to keep the account active, the minimum annual amount required is Rs. 500, and the maximum amount is Rs. 1.5 lakhs in a financial year.

2. Bank Fixed Deposit(FD)

A bank fixed deposit is one of the safest choices for investment in India. Under the deposit insurance and credit guarantee corporation (DICGC) rules, each depositor in a bank is insured up to a maximum of Rs. 1 Lakh for both principal and interest amount. There are diverse flexible ranges of monthly, quarterly, half-yearly, yearly or cumulative interest options which the depositor can choose according to their need. A conventional fixed deposit scheme is a good option to preserve a part of one’s saving. Thereby, many financial corporations are in the scene to facilitate the investors. Some of the banks and financial unit’s FD interest rate are given below for the investor’s better understanding:

Bank Tenure Interest Rate
SBI 180 days to 210 days 6.35%
HDFC 46 days to 6 months 6.25%
Axis Bank 6 months to 8 months 29 days 6.75%
Bajaj Finance 12 months to 60 months 8.65%
Kotak Mahindra Bank 180 days to 269 days 7.00%

3. Debt Mutual Funds

Debt mutual funds are ideal investment plan for steady returns. Compared to equity fund, debt mutual funds are less volatile and less risky. Buying a debt fund is equivalent to giving loan. Debt fund primarily invests in fixed-interest generating securities like corporate bonds, government securities, treasury bills, commercial paper and other money market instruments. The basic reason behind investing in debt mutual fund is to earn interest income along with capital appreciation. Therefore, this is called ‘fixed-income’ securities, because the investors are provided with fixed interest income. There are several debt funds with different lock in period available in the market to cater diverse needs of various investors.

4. Equity Mutual Funds

Equity Mutual funds mainly invest in equity stock. It aims at achieving wealth accumulation by means of robust investment strategy. As per the current Securities and Exchange Board of India (SEBI) Mutual Fund Regulation, if a fund invests at least 65% or more of its portfolio in equities, then and only then it will be classified as an equity-oriented fund. Best equity fund offers high return within the short or long term maturity timespan. Since equity funds mostly invest in stocks, they are considered as risky and fluctuating at a same time. By investing in an equity fund, one can get exposure into a number of stocks by investing a nominal amount of money.

5. National Pension System

National Pension System (NPS) is a pension cum investment scheme launched by Government of India which aims at providing old age security to its citizens. Managed by Pension Fund Regulatory and Development Authority (PFRDA), NPS is a long-term retirement focused investment policy. Main objectives of NPS are as follows:

  • Provide old age income
  • Reasonable market based return policy over long term
  • Expanding old age security coverage to all citizens of India

This investment scheme is a mixture of equity, fixed deposits, corporate funds, liquid funds and government funds. To remain active, the criteria of minimum annual contribution for an NPS Tier-1 account has been reduced from Rs. 6000 to Rs. 1000.

Above mentioned are the most common investment plans among the Indian citizens that are considered as the smart investment as these are the investment plans that provide decent returns with safety. Among all these, Fixed Deposit is being very popular nowadays as it ensures high return of interest along with safety. On this account, Bajaj Finance FD is facilitating the investors with lucrative interest rate and other facilities to boon. Before going for any investment plan, investors should check and cross-check all the available facilities given under these schemes.

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