In India, multiple investment options promise high returns. Consequently, where to invest money in India can be a confusing question for beginner-level investors.
If you are stuck in such a situation, we have you covered! Read on to learn where to invest money in India.
Where To Invest Money For Good Returns In India
To answer your question, "where to invest the money in India?" let’s start with some of the best investment opportunities available. All these investment options offer different levels of risk and return.
Stocks
Stocks are one of the most attractive investment options in India. It is favoured by those seeking long or short-term investments with high returns. However, it is crucial to remember that investing in stocks is risky and you should invest only after having a good understanding of the market.
Before investing , you should do thorough research to select the best stocks for you. There are different types of stocks such as growth stocks, value stocks etc.
These stocks can be screened on key parameters like market capitalisation of the company, net profit and more. Before making a decision, you need to consider the fundamentals of the company, the sector it belongs to, the current market scenario etc.
Mutual Funds
A mutual fund is a pooled investment vehicle in which multiple investors invest in stocks, bonds and other market instruments. It is suitable for an individual who is looking for a balanced mix of risk and return but is unable to monitor the market on a regular basis. This is because your investments are managed by a professional. Although mutual funds put your money in the market indirectly, they aren’t entirely risk-free.. However, a systematic investment plan (SIP) can help you ride out market volatility.
Public Provident Fund (PPF)
The PPF is a government-backed fixed-income scheme. It is a risk-free investment option as the government guarantees its returns.
Public Provident Fund (PPF) is among India's safest and most stable long-term investment options. It is tax-free and can be opened at any bank or post office.
The investment made in PPF is locked in for fifteen years, which can be extended for another five years. The only disadvantage of having a PPF account is that you cannot withdraw the money invested until the end of the sixth year. However, in case of an emergency, you can borrow against the balance in your PPF account.
National Pension System
The National Pension System or NPS is a long-term investment option for retirement savings and is administered by the Pension Fund Regulatory and Development Authority (PFRDA). To maintain an NPS Tier 1 account operational, the minimum annual contribution is ₹1,000. It comprises a combination of fixed deposits, equities, cash, corporate bonds, sovereign wealth funds and other financial instruments.
Bank Fixed Deposit (FD)
Bank FDs are considered as one of the safest investment options in India as banks rarely default on them. Bank FDs offer significantly higher interest rates than regular savings accounts. Under Section 80C of the Income Tax Act of 1961, investors can claim a deduction of up to ₹1,50,000 per year for a five-year investment in a tax-saving FD.
Interest rates on FDs can vary depending on the investment period, amount and residency status (NRI or non-NRI). Additionally, banks have a lock-in period for FDs. If you withdraw your investment during the lock-in period, you will have to pay a penalty.
Real Estate
Property investment is also popular in India. Although it requires a significant amount of money, the returns can be enormous. You can make money by selling it or renting it out. However, when buying or selling a property, you need to take into account all the expenses involved, such as registration fees, property taxes, etc. All in all, real estate can be a good long-term investment option.
Investing In Gold
In India , gold is one of the most trusted and oldest forms of investment. Buying gold coins, bars or ornaments used to be the conventional way to invest in this precious metal. However, the process has evolved. Instruments like gold deposit schemes, mutual funds, gold ETFs are available , making investing in gold easier, faster and safer.
Senior Citizen Savings Scheme
The Senior Citizens Saving Scheme (SCSS) is a tax-free investment option for people aged 60 and above in India. It provides a stable income and hence is therefore well suited for senior citizens. The duration of the SCSS is five years, after which it can be extended for another three years. The maximum investment limit is ₹30 lakh and you can open multiple accounts. Interest on SCSS is paid quarterly and is fully taxable.
Conclusion-
In addition to the above, there are many other investment opportunities in India. Each of these has a different risk profile and no single investment can meet all your needs.
Therefore, you must carefully consider each option and choose the ones that best meet your investment objectives. It may be difficult, but with a thorough understanding, you can make wise decisions and help your capital grow.
Disclaimer
The investment options and stocks mentioned here are not recommendations. Please go through your own due diligence and conduct thorough research before investing. Investment in the securities market is subject to market risks. Please read the Risk Disclosure documents carefully before investing. Past performance of instruments/securities does not indicate their future performance. Due to the price fluctuation risk and the market risk, there is no guarantee that your personal investment objectives will be achieved.