10 Best Investment Options In India 2024 (2024)

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This government-backed fixed income scheme can be considered a risk-free investment as its returns are guaranteed by the government.

Its features include:

• Availability
  Available at almost all Indian banks and post offices.
  You can only open one account.
  No restriction on the age limit to open an account. A minor’s account is handled by their guardian till the age of 18.
• Investment Amount
  Minimum investment amount is INR 500 per annum.
  Maximum amount is INR 1.5 lakh per annum.
  You can deposit anywhere between one to 12 times in one financial year.
  Return on Investment
  The current interest rate is 7.10% per annum.
  PPF interest rates are floating in nature, which implies they could change every quarter. The interest rate change is anywhere between 0.25% to 0.75% in general.
• Maturity
  A PPF fund matures in a span of 15 years.
  Partial withdrawals are allowed after five years of the account opening.
• Taxation
  Investment in PPF is tax-free.
  Interest earned on your investment is also tax-free.

The post office monthly income scheme is popular in domestic households, especially among housewives and those individuals who are earning passive income and looking to invest that to make some returns.

• Availability
  The Indian postal service offers single account, joint account (up to three adults), a guardian or parent of a minor and/or of a person of unsound mind; and even under the name of a minor above 10 years of age.
• Investment
  A minimum investment of INR 1,000 is required to open an account and a maximum balance of up to INR 4.50 lakh and 9 lakh are permitted for single and joint accounts, respectively.
• Maturity
  Account can be closed after five years from the date of opening. However, premature closure before one year is not allowed. Similarly, 2% is deducted from the principal amount if the account is closed between one year and three years, and 1% for three and five years.
  Nominees can file a claim if the depositor dies before the maturity period.
• Return on Investment
  The scheme offers an interest rate of 6.60% per annum payable monthly.
  The interest amount can be auto credited into the depositor’s savings account, or through electronic clearance service.
• Taxation
  Interest earned on the deposit is taxable.

The Indian government has opened direct purchase of bonds for individual investors, who could earlier trade in government bonds only via gilt mutual funds, to encourage domestic participation in the sovereign bond market.

• Availability
  The government announces its bond offering ahead of the date of auction. Both the state governments and the Central government issue these bonds.
  The bonds issued by the State are known as State Development Loans, and the ones issued by the Center are known as G-Secs or just government bonds.You must have a bank account at a bank to purchase government bonds. You can hold government bonds in a demat account.
• Investment Amount
  The price of the bond is also announced at the time of the bond announcement by the government.The easiest way to invest in G-Secs is to use the e-Kuber App, the application of choice for the central banking authority, the Reserve Bank of India’s.
  The other way is to participate through a commercial bank listed by the government for that purpose or a primary dealer. For that, you will have to open a securities account.
  You can buy it through stock exchanges as well. For instance, NCB-GSec is the Bombay Stock Exchange’s online platform for this purpose while the National Stock Exchange has the NSE goBID mobile application.Broking platforms can also be used for buying it.
  You can also invest in government securities mutual funds. These funds invest in government bonds.
• Return on Investment
  Most government bonds are fixed rate bonds, which means the interest rate is fixed for the entire tenure of the bond till maturity.Depending on the coupon rate determined at the time of purchase of the bond, you get a half-yearly interest for the stipulated bond holding period.Any capital gain (or capital loss) when the bond is sold or matures.Income from reinvestment of the interest payments that is interest-on-interest.
• Maturity
  The maturity period of a government bond can be a year or more depending on the offering.
• Taxation
  Tax will be charged as per a person’s income bracket from the income generated by the interest that one receives from these bonds.Any price increase in the value of the bond will also be regarded as capital gains and taxed accordingly.

The National Pension Scheme is for those who intend to build a robust retirement fund by investing their savings into a government-monitored pension fund that invests in diversified stock market portfolios including government bonds, corporate debentures and shares. The returns or the accumulated pension wealth made on such investments are used to purchase a life annuity and a portion is available for withdrawal at the end of the scheme cycle.

Two kinds of NPS accounts exist: Tier I NPS Account and Tier II NPS Account.

Features of Tier I NPS Account

• Availability
  Indian citizens between the age of 18 and 65 can invest.An account can be opened by visiting an authorized bank or any of its branches called point of presence (POP) appointed by the Pension Fund Regulatory and Development Authority. Alternatively, by visiting the eNPS web portal.After a request for opening an account, you receive a 12-digit number and a permanent retirement account is created.
• Investment Amount
  You can open this account by depositing INR 500.To keep the account active, you have to deposit at least INR 1,000 in a financial year.No upper limit on how much you can invest per year.
  You cannot withdraw your invested amount until age 60.
• Return on Investment
  Returns are calculated on the basis of the net asset value declared by the pension funds of various banks.They are not predetermined and depend on how your investment has fared through the years.
• Maturity
  After reaching the age of 60, you can withdraw a maximum of 60% of your total balance.The remaining 40% has to be compulsorily used to buy a pension plan of your choice.
• Taxation
  Investment of INR 2 lakh per annum is exempted from tax under Section 80 C and Section 80CCD.
  Returns earned on NPS tier I accounts are exempted from tax.

Tier II NPS Account

• Availability
  This is a voluntary account and can be opened only if an individual already has an NPS Tier I account.You can open an account offline at any authorized bank or its POP appointed by the PFRDA. An online account can be opened by visiting the eNPS portal.
• Investment Amount
  A minimum investment amount of INR 1,000 at the time of opening the account.No annual contribution mandatory like in the case of an NPS Tier I account.No maximum limit on how much you want to invest.Each year, you decide how much of your money you want to invest in the four asset classes available: government bonds, corporate bonds, equities and alternative assets.Investment has no lock-in period.
• Return on Investment
  Return on your investment is not predetermined. It depends on the net asset value declared by pension funds in each investment cycle.
• Maturity
  After reaching 60, you can withdraw a maximum of 60% of the total corpus.The remaining 40% is used to buy a pension plan of your choice.
• Taxation
  There are no tax benefits and income from it is taxed as per your tax slab.Only government employees get tax benefits if they keep their investment locked for three years.

SGBs are government securities issued by the Reserve Bank of India (RBI) and denominated in gram(s) of gold. They are issued in multiples of gram(s) of gold with a minimum investment of 1 gram.

• Availability
  SBGs are open for auction on dates announced by the central government. These bonds are issued by the RBI multiple times a year.
  You must have a PAN Card to buy an SGB.
  You can buy SGBs from banks, post offices, stock brokerage companies both online and offline.
• Investment Amount
  Each bond unit you purchase has the value of one gram of pure gold based on gold’s average closing price of the previous three business days. You can purchase a maximum of 4 kgs of SGBs for individuals and 20 kgs for trusts. You currently receive a discount of INR 50 on each gram purchased online.
• Return on Investment
  2.5% paid twice a year.
• Maturity
  Eight years. Early redemption after five years.
• Taxation
  Interest payments are taxed based on your tax slab.Any gains made at maturity are free from tax.

An equity mutual fund is an investment vehicle that pools investors’ money and invests it in stocks to generate returns.

• Availability
  You can readily invest via SEBI-authorized individuals, agencies and stock brokerage companies online or offline.
• Investment Amount
  Most mutual funds expect a minimum investment of INR 1,000; there is no cap on the maximum amount that can be invested.
  To invest in equity mutual funds, you need to have a demat account and a trading account.
  There are mainly eight types of equity mutual funds for investors to choose from.
  One can also invest in equity mutual funds known as growth funds. This can be done without opening a demat account.
• Maturity
  Investors are free to redeem their investments in open-ended equity mutual fund schemes.
  In case of equity-linked savings schemes under the equity mutual fund umbrella, a lock-in period of three years from the date of investment exists.
• Return on Investment
  Equity mutual funds are known to deliver the highest returns among other kinds of mutual fund investments. For instance, some equity mutual funds have given a 5-year annualized return of up to 35% and as high as 117% in a year of historic highs in 2021.
  The return depends on the market fluctuations and the overall economic scenario.
• Taxation
  In case of a short-term capital gain, tax is applied at 15% plus 4% cess.
  For long-term capital gains, if the profits are less than INR 1 lakh in a financial year, the investment return is completely tax-free.
  If the long-term capital gains are more than INR 1 lakh, tax is levied at 10% plus 4% cess.

ULIPs are plans that provide consumers the dual benefit of insurance and investment. The way ULIPs work is simple: the policyholder can purchase an insurance plan for which the premium paid is used to provide a cover and the remainder is invested between equity and debt funds.

• Availability
  You can purchase ULIPs from any bank or insurance company operating in India.
  Financial institutions expect you to provide your proof of income given ULIP is a long-term investment product.
• Investment Amount
  The minimum investment in ULIP varies from one financial entity to another. Generally, a minimum of INR 1,500 is required as premium payment per month.
  Since ULIPs fall under the Section 80 C tax exemption category, an investment of up to INR 1.5 lakh per year can be done to get a tax benefit.
  The maximum investment in a ULIP policy depends upon one’s capacity to pay annually for the tenure of the policy.
  Charges for actions such as premium allocation, fund management, fund switching, partial withdrawal, premium redirection and discontinuance among others are all over and above the premium one pays annually for the ULIP.
• Maturity
  ULIPs have a lock-in period of five years, after which the policyholder can withdraw their funds without any penalty and are also eligible to continue the policy depending on its terms and conditions.
  Payment of premiums can be halted after three years but the withdrawal of funds invested is possible only after the maturity period of five years. ULIPs are considered long-term investment plans with up to 10 years considered an average investment period.
  You can lose out on a percentage of your prospective returns upon partial withdrawals before the maturity date.
• Return on Investment
  The expected annual rate of return can be calculated by calculating the ULIP NAV by using the simple formula:
  NAV = (Value of current assets + value of investments) – (value of current liabilities and provisions)/Total number of outstanding units on a specific date.
  To calculate the rate of return upon maturity or at the end of the policy period, the method of compounding is deployed and it is advisable to contact your financial services provider to know the rate of return of your ULIP for accuracy.
• Taxation
  ULIPs fall under the EEE category of Section 10 D; this implies ULIPs are exempt-exempt-exempt for the tax levied on the investment, the proceeds and on withdrawal of funds after the lock-in period of five years of a ULIP is complete.

Gold ETFs are equivalent to buying gold in the physical form without the hassle of holding physical gold. They require investors to open a demat account and hold gold units in a dematerialized form similar to how investors hold mutual fund units.

• Availability
  You can buy units of gold by opening a demat account, exactly in the same manner that one invests in shares from the stock brokerage companies and agencies registered with SEBI.
  If you do not have a demat account, you can invest in gold funds offered by some of the banks or from various gold ETF funds.
• Investment Amount
  A minimum of one unit, which is equivalent to a gram of pure gold, is recommended. This physical gold is stored with depositories and it acts as underlying via which the units of the ETFs derive value.
  There are gold funds in the market where you can start at as low as INR 500.
  There is no limit to the number of gold ETF units that one can purchase.
• Maturity
  As the price of gold increases, the value of your unit will also increase, and vice versa. You can exit a gold ETF when you want—there is no lock-in period.
• Return on Investment
  Just like an equity mutual fund, ETFs can also be traded on stock exchanges. Hence, their return depends on the gold ETFs’ performance in the market.
• Taxation
  If you sell your gold ETF before 36 months of acquiring it, then you will be taxed as per your slab. After 36 months, long-term capital gains tax of 20% plus 4% cess is applicable.

Considered a low-risk investment, corporate bonds are debt securities issued by companies to raise capital, providing regular interest payments and the return of principal at maturity.

• Availability
  These bonds are typically available through financial institutions, including banks and brokerage firms, and can be purchased on the open market through various trading platforms.
• Investment Amount
  Investors can start with varying minimum investment amounts depending on the issuing company and the type of corporate bond. Some corporate bonds have minimum investment requirements, while others are more accessible to individual investors.
• Return on Investment
  The return on investment from corporate bonds primarily comes from the interest payments, known as coupon payments, which are usually paid semi-annually. When the bond matures, investors receive the face value of the bond, which is the principal amount.
• Maturity
  Corporate bonds have varying maturity dates, and investors can choose bonds with terms that align with their investment goals and time horizon.
• Taxation
  The tax treatment of corporate bonds depends on factors such as the type of bond, the issuer, and the investor’s tax status. Interest income from corporate bonds is typically taxable, but specific tax rules can vary. It’s advisable to consult a tax professional for guidance on tax implications.

Initial Public Offerings (IPOs) mark the moment when a private company decides to go public by offering its shares to the general public. It’s a significant financial event that often garners significant attention from investors, as it presents an opportunity to become an early shareholder in a company’s journey on the stock market.

• Availability
  IPOs are accessible to retail investors through brokerage firms and online trading platforms. Most brokerage firms offer their clients the ability to subscribe to IPOs by opening a Demat and trading account, making the process relatively straightforward. IPOs are typically announced well in advance, allowing investors time to prepare and evaluate the company’s prospectus.
• Investment Amount
  The investment amount required for participating in an IPO can vary significantly, depending on the company and its pricing. Generally, investors can subscribe to IPOs with relatively small amounts of capital, at times even INR 100 or even lower, making them accessible to a broad range of individuals. However, larger investments may increase the chances of allotment.
• Maturity
  IPO investments typically do not have a lock-in period. Investors can sell their shares as soon as they are listed and tradable on the stock exchange. This provides liquidity and flexibility for investors who may wish to exit their positions.
  IPOs come with certain risks, such as the potential for market volatility, as the stock price may fluctuate significantly in the initial days and weeks after listing. Additionally, the company’s success and future stock performance can be uncertain. It’s crucial for investors to carefully study the company’s financials, business model, and competitive landscape before participating in an IPO.
• Return:
  Returns on IPO investments can be substantial, especially if the company experiences significant growth after going public. Investors may benefit from capital appreciation as the stock price rises, and some IPOs also offer dividends. However, IPOs can be volatile, and it’s essential to conduct thorough research before investing.
• Taxation:
  Tax implications for gains made from IPO investments depend on factors like the holding period and the prevailing tax laws in your region. Consult with a tax professional to understand the tax treatment of your IPO investments.

There is no one-size-fits-all approach to investing. The best investment options for you depend on your individual financial situation, goals, and risk tolerance. It’s important to have a well-thought-out plan, stay diversified, and regularly monitor and adjust your investments as necessary to stay on track toward achieving your financial objectives.

Selecting the best investment options for you involves a thoughtful and systematic approach. Here’s a step-by-step guide to help you make informed investment decisions:

• Set Clear Financial Goals: Start by identifying your financial objectives. Are you saving for retirement, a home, education, or simply looking to grow your wealth? Clearly define your goals and the timeframes for each.
• Assess Your Risk Tolerance: Understand your risk tolerance and investment horizon. Different investments carry varying levels of risk. Determine how much risk you are comfortable with and for how long you can leave your money invested.
• Diversify Your Portfolio: Diversification helps spread risk. Don’t put all your money into a single investment. Allocate your investments across different asset classes like stocks, bonds, real estate, and cash equivalents.
• Understand Investment Options: Familiarize yourself with various investment options. Learn how they work, their potential returns, and associated risks. Research online, read books, and consider seeking advice from financial professionals.
• Consider Tax Implications: Evaluate the tax implications of your investments. Different investment options may have different tax treatment. Be aware of how your earnings will be taxed and plan accordingly.
• Keep Liquidity in Mind: Ensure you have enough liquidity to cover unexpected expenses and emergencies. Some investments are less liquid than others, so be prepared for potential short-term cash needs.
• Evaluate Costs and Fees: Consider the costs associated with your investments. High fees can erode your returns over time. Compare expense ratios, management fees, and transaction costs.
• Review Your Investment Periodically: Regularly review and adjust your investment portfolio based on changing circ*mstances, goals, and market conditions. Rebalance your portfolio as needed to maintain your target asset allocation.
• Consult a Financial Advisor: If you’re unsure about your investment choices or need expert guidance, consider consulting a qualified financial advisor. They can provide personalized advice based on your unique financial situation and goals.
• Start Small and Scale Up: If you’re new to investing, start with a small amount and gradually increase your investments as you gain confidence and experience.
• Stay Informed: Stay updated on economic and market trends. Knowledge is a powerful tool for making informed investment decisions.
• Stay Disciplined: Avoid emotional decision-making. Stick to your investment plan, even during market volatility. Emotional reactions can lead to poor investment choices.