10 Schemes to Invest in India
There are various investment options available for investors in India, what’s important is to decide on the time-period and amount. Focus, commitment and patience are important no matter which scheme you choose, as all are good in their individual capacities. The investment options described are classified on the basis of the investor’s risk appetite, return on investment and liquidity. All these points should be taken into consideration while making investment decisions.
1. Precious Metals: India’s affinity to the yellow metal is from ages and is a conventional option when the thought of investment creeps in. Traditionally, investments were made in jewelry or Gold Bar. But, new avenues of investment in gold include: Gold ETF, Gold Bonds, Gold Deposit, Gold Futures, etc., which are good investment options in the time of economic contraction, geo-political tensions and situation of hyper inflation.
2. Fixed Deposit with Banks: Bank Deposit made for the period of five years fetches returns between seven to eight per cent. However, returns in bank deposits are subject to TDS deduction.
3. Public Provident Fund (PPF): This is one of the best and secure long-term investment option providing tax free returns the only draw-back being less liquidity wherein your investment is blocked for 15 years. Nonetheless, one can withdraw a part of the money at the end of the sixth year. There is also an option to take loan on balance amount of PPF.
4. Post Office Saving Schemes (POSS): Post office offers various schemes of deposit including National Saving Certificates, Kisan Vikas Patra, Monthly Income scheme and Recurring Deposit Scheme. They are hugely popular for their higher rates of return and for being totally tax-free.
5. Corporate Fixed Deposit: Corporate FDs are preferred over bank FDs for providing higher rates of return as compared to the latter. They are instruments to borrow money from investors. Corporate FDs are not governed by the Reserve Bank of India; therefore, they are mostly suitable for long term investors who can bear a certain amount of risk.
6. Bonds: For risk averse investors, bonds assure decent and assured returns. One may opt for Government 10-year bond, which gives interest rate of 7.7%.
7. Unit Linked Insurance Plan: ULIP schemes invest in equities and debt markets. Although, it is not a very lucrative investment option as there are various charges levied in the account, it ensures returns between 7-8%.
8. Real Estate: Real estate offers huge prospects in major sectors like, Housing, Commercial, Hospitality, etc. and has potential of generating good returns in the long run.
9. Mutual Fund: MFs are fast gaining popularity as the most preferred mode of investments for investors who either do not have adequate understanding of financial markets or time to monitor their portfolio on a daily basis. Moreover, MF schemes provide investors the options to balance their risk and return.
10. Shares: It is also known as direct investment. It could be a good investment option for investors who have a basic understanding of fundamental and technical facts of the markets. Investment could be made either through Primary or Secondary Markets.