Last Update – 23 Jan 2022
Invest today to make your future financially secure.
Wise people make an investment and other people just hold their savings.
Best investment plans help you to meet the future inflation and become a passive source of income. This merely depends on the type of investment you choose. Your, future short term and long term goals & risk bearing capability help you to figure out the best investment plans in India 2022
Here is a list of 11 Best Investment Options in India
Best Investment Plan With High Returns in India 2022
#1. Investment In Equities
If you ask me, where to invest in India for maximum returns, I would suggest you to in the equities.
In fact, as per analysis, the return on the equities is highest as compared to the other investment plans. There is no upper limit of return on equities. Even many investors get more than 20% return on their investment through equities.
But, higher returns come with greater risks. The same applies to the equity. The Probability of rising in the share market is always equal to the probability of its downfall.
The risk can be reduced by making a wise decision while making an investment in equity.
Things to Keep in Mind While Investing in Equities
- If you are the beginner, make your research to figure out how it works before. This will help you in avoiding herd mentality.
- Always invest, with a vision for long-term investment. If you invest for the long term with a term of 10 -15 years it will give the best return on the investment.
- Never invest, your all saving in the stock market. 50%-70% of total saving is ideal to invest in the stock market. It will make your investment portfolio diversify.
- Make a list of your favorite stocks. Make a deep search on these shares past performance and company’s future plans. After doing all this research, invest in shares.
- Never invest in the random shares for those you don’t do any research work.
My advice – Brokerage companies provide free investment advice. Never become a blind follower for their advice. Merely their advice for tempted their clients to indulge in trading on which they earn brokerage. Go ahead with your own research.
#2. Investment in Mutual Funds (Best Investment Option for Salaried Person 2022)
Mutual funds are the best investment option to invest in equities and bond with a balance of risk and return.
In mutual funds, you can diversify your investment portfolio across a large number of securities.
You can invest in equities of different sector companies like finance, energy, healthcare, technology. This will reduce the overall risk. For example- in any case, one sector is not performing well, but the other sectors are doing well, still, your portfolio will be in profit,
Systematic investment plan (SIP) (best Investment option for a salaried person) is the best way of investing in mutual funds in which a fixed sum is invested at regular intervals in the mutual funds. The minimum amount of SIP is Rs 500 per month.
#3. Real Estate Investment
One of the fastest-growing investment sectors in India is real estate. Some years ago, people bought house, plots or commercial place for own use. But due to change in investment trend, they start investing in real estate with a perspective of making a higher profit in the future by selling these.
- As you already know, there is no minimum or maximum investment limit in real estate.
- Sometimes prices are artificially driven up, must take care of this while investing.
- There is no tax exemption on investing in real estate.
- Profit on selling property is fully taxable.
Investment in real estate only depends on how wisely you make the investment. For example, suppose you buying a plot at some remote place, if there is a chance of development in the future you will make a huge profit. On the other hand, if there will no activity you would not make any good returns.
Also, Read How Much a Lic Agent get Commission
Best Long-Term Investment Plans In India
#4. Public Provident Fund Investment (Tax-Free Investment in India 2022)
The public provident fund is one of the safest and secure long-term tax saving investment plan in India. The reason is, PPF investment is being operated by the Indian government.
You are either a salaried person or a businessman you should consider the public provident fund as your one of the best investment options. Because it makes your investment portfolio balanced and also helps in income tax saving under Sec 80C.
PPF account can be opened at any nationalize, authorized bank & some specified private banks and post office. In the PPF, a deposit has to make every year.
Key Points of Public Provident Fund
- It is for long-term investment. The investment period is for 15 years. This is can be extended for 5 years at every renewal.
- The minimum amount of investment in PPF is INR 500.
- The maximum amount is INR 1,50,000 if you are considering the income tax deduction under section 80C.
- The current rate of interest on PPF saving is 7.9%. Which higher than the fixed deposit.
- You can earn the compound interest on your investment.
- The interest and maturity amount is tax-free.
- You are allowed to withdraw your investment from your account only after the end of 6th year.
Interest rate on PPF investment from last 5 years
|Financial year||Rate of interest|
I have summed up all the information that you should know about PPF, here it is PPF Investment ( Everything you should know).
Best Investment Plan For 5 Years
#5. National Saving Certificate for 5 years
The National saving certificate is a saving bond by the Indian government, Primary use for small savings and tax saving.
As NSC is a government saving bond, this is a risk-free investment option. It is a part of the Indian postal service and can invest at any post office in India.
- The term period of the NSC VIII has fixed for 5 years.
- The rate of interest is 6.8% compounded annually.
- Investment up to INR 1,00,000/- per annum qualifies for tax rebate under section 80C of Income Tax Act.
- There is no maximum limit for investment.
- The minimum limit is INR 100.
- Saving certificates can be kept as collateral security to get a loan from banks.
- The interest received from NSC is taxable.
NSC is best to invest in low risk and for short period investment of up to 5 years. In the long run, PPF is better because of tax-free interest.
Also read – Hedonova Alternative Assets Investment Review
Best Investment Plans For 3 Years in India
#6. Equity Linked Saving Schemes (ELSS)
Equity-linked saving schemes belong to mutual fund class. Like the mutual funds, in ELSS invests in equity.
ELSS is basically a diversified equity mutual fund which gives you the benefit of tax deduction under section 80C of the income tax act. It is also known as ‘tax saving mutual funds’. This makes the ELSS the best investment plan for 3 years.
Most Indians do not explore this investment option. It is the best investment to get exposure to equity as well save some tax under 80C.
Even the Indian Government encourages ELSS investments to bring the common man into equity.
Key Points Of ELSS Investment
- Least lock-in period as compared to other tax-saving schemes i.e. 3 years.
- Investment up to INR 1,50,000/- per annum qualifies for tax rebate under section 80C of Income Tax Act.
- There is no maximum limit on investment
- The minimum investment limit is INR 500.
- Dividends and capital gains are also tax-free in the case of ELSS.
- The average return on the ELSS for the last 5 years is around 18% p.a.
ELSS is an equity-linked plan, so it has a high potential for returns. But you cannot neglect the risk factor. The returns are based on the stock market and involve high risk.
So, this is best suitable for those investors who are looking for high potential investments with a medium-term period.
Some of the most famous ELSS plans are
- Axis long-term equity fund.
- Reliance tax saver equity fund.
- HDFC tax saver.
- SBI ELSS.
- ICICI Prudential Tax plan.
Short-Term Best Investment Plans In India
#7. Investment in Short-Term Fixed Deposits
Short term fixed deposit is the most popular short-term investment plan. In the fixed deposit an amount is deposited for a fixed period of time. On the maturity of that fixed period, you get the principal along with the interest incurred on it.
You can invest money in fixed deposits for the long term also. But in the long run, other investment plans would give a better return as compared to the fixed deposit, So I recommended FD only for a short period.
You have the following options for investing in the fixed deposit
Fixed Deposit with the Post Office (Time Deposit)
This is one of the most secure fixed deposit options that has done with the post offices. The minimum period for deposit in the post office is 1 year and the maximum is 5 years. The rate of interest varies from 5.5% – 6.7%.
Fixed Deposit with Banks
This is one the most common and well known fixed deposits. In terms of security of principal, it is at the second position after the post office fixed deposit. Because of private sector banks.
The minimum tenure of fixed deposit in banks is 7 days and the maximum is 10 years. The interest rate varies from 3.50% to 6.75% depends on the bank and tenure of a fixed deposit.
Check here Present Fixed Deposit Interest Rate
Fixed deposit with Companies
This term would be new for you, but it is also an option for investing in fixed deposit. Many corporates and financial houses also offer investors to open fixed deposits. The interest rates are little higher than bank FD rate depends on the corporation.
The fixed deposit with the companies is not fully secured because no person is liable to pay back your principal in the case of company defaults.
The fixed deposit tenure ranges between 12 months to 60 months. The rate of interest varies from company to company.
#8. Recurring Deposit (RD) Investment
Recurring deposit is the best option for those who are not able to invest a lump sum and looking for monthly or quarterly investment in a security plan. An RD is usually opened for a fixed period of time and deposits must be made at predetermined intervals which may be monthly, quarterly, depending on the terms and conditions of the deposit scheme.
You can use bank RD or postal RD.
1. Bank Recurring Deposit
You can open an RD account in any bank.
Key points of Bank RD
- The minimum tenure of RD is 6 months.
- The maximum tenure is 10 years.
- The minimum amount of deposit limit is Rs 10.
- The current interest rates available from different banks range between 3.5% and 6.5% per annum.
2. Postal Recurring Deposit
You can open an RD account in any post office also.
- The tenure of postal RD is 5 years.
- The minimum amount deposit limit is Rs 10 or can deposit in multiples of 5.
- There is no maximum amount of deposit limit.
- The current interest rate is 5.8% per annum compounded quarterly.
You can Open your RD & FD deposit account through net banking & make an online money transfer.
The Best Investment Plans In LIC
Life insurance becomes another famous option for investment. Because it fulfills the dual purpose, it provides life insurance along with investment. The life insurance companies pay a fixed rate of bonus along with the final additional bonus at maturity time.
#9. LIC Jeevan Labh ( Table No. 836)
Lic Jeevan Labh is one of the best life insurance plans by Lic. Jeevan Labh is a limited period premium paying, non-linked, with-profit endowment plan. Along with all this, it also helps in tax saving.
Key Points of LIC Jeevan Labh
- Policy term will be 16 years, 21 years or 25 years.
- Premium paying term will be of 10 years (for 16 years), 15 years ( for 21 years) and 16 years ( for 25 years).
- Minimum sum assured is Rs 2,00,000. No maximum sum assured limit.
- The minimum age at entry should be 18 years.
- Maximum age at entry is 59 Years (for 16-year policy term), 54 years (for 21-year policy term) and 50 Years (for 25-year policy term).
- The maturity amount is tax-free under 10D.
- Paid premiums on this policy are exempted from income tax under 80C.
Maturity Benefits of LIC Jeevan Labh
Maturity benefit (Benefits payable on maturity) = Basic Sum Assured + vested Simple Reversionary Bonuses + Final Additional Bonus, if any.
Death Benefits of Jeevan Labh
Death Benefit =Sum Assured on Death + vested Simple Reversionary Bonuses + Final Additional Bonus if any.
Best Investment Plans In India for Child
#10. Sukanya Samriddhi Account Yojana (SSA)
Sukanya Samriddhi Yojana is an investment scheme introduced by the Indian government only for girls child. If you are looking for an investment plan for your girl child having no risk then SSA is best investment plan for you.
In SSA you can invest for your girl child’s higher studies or for marriage. The rate of interest on SSA is higher than the other no risk investment plans like PPF, NSC, and fixed deposits.
Money deposited in SSA will be eligible for tax deduction under 80C up to the limit of Rs 1,50,000 per annum.
- The account can be opened from the birth of a girl child till she attains the age of 10 years.
- Tenure of SSA is 21 years from the date of opening of the account.
- Minimum yearly investment is Rs. 1000
- Maximum investment limit is Rs. 1,50,000 per year.
- You can practically withdraw from the account up to 50% only in case of financial urgency. The child must attain the age of 18 years for such withdrawal.
- At the time of marriage of the child, the account will automatically close. Whether it happen before the 21 years of account opening.
- The current interest rate is 8.1% compounded annually.
Best Investment Plans In India For Senior Citizen
#11. National Pension System ( NPS)
NPS is established by the Indian government with the objective of providing pension benefits to all the citizens. Due to the involvement of the government, this is a safe investment plan for pension purpose.
There are two types of options available to create your portfolio.
Tier 1 account – Under this account, subscribers cannot withdraw funds before they retire. It is compulsory for all government employees to invest or direct 10% of their salary into this account.
Tier 2 account – Under this account, subscribers are free to invest funds as well as withdraw funds as per their convenience. However, a subscriber must possess a Tier I account in order to open a Tier II account.
Key Points Related to NPS
- Any person between the age group of 18 to 60 can subscribe to the NPS.
- The minimum investment limit is Rs 500 per month.
- The government makes a contribution of Rs 1000 per year to each individual NPS account for the initial four years.
- Funds available for investment in NPS include equity, the government fixed income instruments and non- government fixed-income instruments.
- Investment in NPS is also tax exempted up to Rs 50,000 per year under 80CCD(1B) separated from 80C exemption limit.
- The interest rate is not fixed because money is invested in a broad range of investment options. Generally, the interest rate lies between 12%-14%.
Check out – How to open NPS account
The best way to make an investment is, diversify your investment with high returns plans like equities & mutual funds and low risked plans such as PPF, NSC or FD. The ratio merely depends on your risk-taking ability.
If you are at the younger stage you should invest with a higher ratio in higher returned plans, like 70%-80% of your investment portfolio. As you grow you can reduce the ratio and can switch to more secure investment plans.