Selecting the right model of Investment has been one of the key issues for an Investor. However, what can be the right Investment solution for you depends on a number of factors. It is not necessary that an investment option which is suitable for one should also be the right investment solution for another. Also, Investment goals can differ from one person to another. As an Investor, you can look for good returns, liquidity and sometimes may want a short Investment period. Your cash requirements may differ from one another person. Another important factor is your Investment Risks bearing capacity.
So one thing comes out very clearly, and that is as an investor you have multiple investment options before you. Here we discuss and provide you with some of the most popular and widely used Investment Options in India. There can be no best option of investment for everybody; however, there are suitable investment options from which you can choose the right kind of Investment mix for yourself depending on your requirements and investment goals. You can go through the following Investment Options in India and can then select the right one or the right mix for yourself.
Investment Options in India
Bank Fixed Deposits (FD)
Bank Fixed Deposits or FD is one of the most popular and prevalent form of investment in India. Bank Fixed Deposits offer a fixed rate of return to the investors which can be anywhere from 6% to 10%, depending upon the period of deposit and the Bank in which you are making an FD. There is practically no limit on the deposited amount. You can even make an FD of an amount as low as Rs. 5000. FD is also considered as a safe investment option as all the Banks in India are governed by the guidelines of Reserve Bank of India. The minimum period for FD is 30 days while maximum period can go up to 5 years or even more. Some banks offer special interest rates to Senior Citizens. So if you want to take a safe step towards investment and prosperity then Bank Fixed Deposits or FD can be a good option for you.
Recurring Deposits (RD)
Recurring Deposits or RD is another popular investment option in India. Usually in RD you have to invest a definite sum of money at regular intervals for a fixed period of time. The time interval is generally for a month. It is again a safe investment option. You have to open a RD Account in the Bank where you need to deposit a fixed sum every month for a fixed period. The tenure of RD can be anywhere between one year to five years. The interest rates for RD are comparable with the returns of FD and are calculated on a quarterly compounded basis. It is a good option for those who do not wish to invest a big sum of money at one time. RD gives a good maturity amount at the end of its tenure.
National Savings Certificates (NSC)
NSC is an investment option in which you invest a definite sum of money with Government of India for a period of six years. There is no upper limit to deposit in NSC and minimum you can have a deposit of Rs. 100. NSC gives 8% return calculated twice a year, and you can also avail Income Tax Deduction under Section 80C up to Rs. 100000. It is one of the safest investment option, and that too with a minimum risk as your deposited amount is held with the Government. So those of you who want to go for a long term of an investment and wish to play safely as far as Investment is concerned, then NSC can be a good choice for you.
Public Provident Fund (PPF)
PPF is an investment option provided from the Government of India. You can invest in the range of Rs. 500 to Rs. 100000 in one financial year. The investor needs to open a PPF Account in a GPO or any of the sub-divisions of Nationalized Banks. The rate of interest in a PPF is 8.1% and is calculated on a yearly basis and has a lock in tenure which can go up to 15 years. You can also get Income Tax Deduction benefit under Section 80C. So people who have the regular income (like salaried class) and wish to plan for their future (example retirement or child’s education, etc) and do not possess lump sum money for investment are best suited for investment in PPF. It is a safe investment option as it is supported by the Government.
Post Office Savings Scheme (POSS)
You can also go for another safe and low risk investment options with Post Office Saving Schemes (POSS). These schemes are offered by Indian Government and are available through Post Offices. POSS offers a wide range of choices such as National Savings Scheme, Kisan Vikas Patra, Monthly Income Plan, Recurring Deposit Scheme, etc. In a POSS, no tax is deducted at source (TDS), which is its major attraction. They also offer a good rate of returns which can are comparable with interest rates of Bank FDs and sometimes can even go higher.
Investment in Gold has been one of best ways to invest your money. It can be used as an instrument to ride over inflammatory market conditions. It is a low risk investment options as prices of gold rarely go down. So if you are looking especially for short term investment, Gold Investment is one of the best ways to make good returns as volatility pricing element is not an issue with Gold rates. Better and quick Liquidity is another advantage of investment in Gold. To invest in Gold, you have different options such as you can buy gold jewelry, gold coins, gold bars, Gold Mutual Funds or Gold ETFs, etc.
Investment in Real Estate
Real Estate Investments provide one of high return investment options in India. Real Estate has seen a tremendous growth in the recent past and is expected to see further growth. It has gained a tremendous demand in the wide variety of sectors like housing, commercial, education, hotels, retail, manufacturing, hospitals, etc. Real Estate Investment is also open to foreign investors. You can make a good amount of profit through this sector, but proper research is required before opting to invest in this sector. So risk factor does come in if you are looking to invest in Real Estate and one should not venture for investment without the prior knowledge of this sector.
Mutual Funds provide another investment medium with which you can make high returns though proportionately you have to be willing to take more risks. People have to select a fund option and then invest their money in stocks of various companies or bonds. These funds are managed by qualified and professional Fund Managers appointed by the Mutual Fund companies. You have to pay certain charges and fees for managing your Fund which can vary from company to company. Mutual Fund gives the flexibility to withdraw the fund value when you need cash and do not have a mandatory lock-in period. The performance of Mutual Fund is subjected on the prevailing market conditions. The investment risk is high but comparatively lower than investing in stocks. Thus, those of you are willing to take the certain level of risk and seek higher returns should go for investing in Mutual Funds.
Investment in Equities
If you are looking for high returns and are willing to take enough investment risks then, Investment in Equities can be a good choice for you. Equities are traded in the Indian Stock Market which generally witnesses very volatile and fluctuating prices in the Equities or Stocks. So one needs to be very careful in selecting Stocks or Equities. Proper and thorough research is needed before investing in any type of stocks. Investment in Equities is not safe and secured medium of investment though risks can be minimized by intelligent investment decisions. Gains are high but are not predictable and are also not guaranteed.
Hence we see that are numerous options of investment available to us in India. As we have already mentioned, there is no best investment option as investment goals and risk taking capacities are different for each person. So an investment option which is good for one person may not be so for another person. That’s why we have discussed most of the options of investment in India so that you can select the ones suitable for your investment goals. A right mix of Investment solution is required to fulfill your future responsibilities and aspirations.