Almost every investor wishes to get the highest returns on their investments with the least risk of losing their principal. Because many people are constantly seeking ways to double their money quickly and with little risk, they are always searching for the best investment options.
It would help to match the risks associated with an investment avenue with your risk profile before investing. For example, investing money in high-risk investments may produce better inflation-adjusted returns than other types of asset classes over the long term, whereas investing money in low-risk investments may generate lower returns.
There are many options for investing money in India:
Direct equity
There is no guarantee of profits and returns when investing money in stocks as they are a volatile asset class. Additionally, deciding which stock to buy, when to sell, and enter are also challenging tasks. Nevertheless, equity has consistently provided higher than inflation-adjusted returns over long periods than all other asset classes.
Equity mutual funds
Mutual fund schemes that invest primarily in equity stocks are called equity mutual funds. As per the Securities and Exchange Board of India (Sebi) Mutual Fund Regulations, equity mutual fund schemes must own shares and equity-related instruments equal to 65 percent of the fund’s assets. Investing in equity funds has two options: active management and passive management.
A fund manager’s ability to generate returns is a significant factor in the fund’s returns. Passively managed exchange-traded funds track indexes that are passively managed index funds. Investing money in equity schemes can be classified by market capitalization or sector. Investors can also be classified by their country of origin (investing only in Indian companies) or their location (investing in foreign companies).
National Pension System (NPS)
PFRDA (Pension Fund Regulatory and Development Authority) manages the National Pension System, an investment product focused on long-term retirement. To stay active, the minimum annual contribution (April-March) for NPS Tier-1 accounts is now Rs 1,000. In addition to equity, corporate bonds, fixed deposits, and liquid funds.
Bank fixed deposit (FD)
The fixed deposit is considered one of the safer investment options in India (when compared to mutual funds or equity). From February 4, 2020, each depositor in a bank will be insured up to a maximum of Rs 5 lakh for both principal and interest under the rules of the Deposit Insurance and Credit Guarantee Corporation (DICGC). The best FD schemes offered by Bajaj FD help you reach your financial goals within a short period of time. It is a paperless process so you can invest in Bajaj FD from your home.
Senior Citizens’ Saving Scheme (SCSS)
The Senior Citizens Savings Scheme is probably the first investment option that most retirees think about before investing money. However, this scheme is only available to retirees and seniors. Any senior over the age of 60 are eligible for SCSS.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
The PMVVY scheme is a program for senior citizens aged 60 years and older that offers a 7.4% return per year. Depending on the option selected, you can choose the monthly, quarterly, half-yearly, or annual pension income. Pension amounts range from Rs 1,000 to Rs 9,250 per month. In this scheme, a maximum investment of Rs 15 lakh is possible. The scheme has a 10-year tenure. The scheme ends on March 31, 2023.
Gold
The possession of gold as jewelry is fraught with problems such as safety and high costs. Additionally, there are ‘making charges’ (which usually range from 6-14 percent of gold’s price and can even go as high as 25 percent). Nevertheless, there are still options available to those who would like investing money in gold coins.
Real Estate
You should never consider your house as an investment; it is for self-consumption. However, the second property you buy can be an investment if you do not live there. Your property’s location is the essential factor in determining how much it will be worth, as well as how much you can earn renting it.
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