Everyone works hard for money as it allows us to meet our daily requirements. From your dream car to the desirable home down the street you’re looking for, money can help you fulfill some of your most luxurious dreams. However, the traditional way of exchanging your skills and time for capital won’t help you reach your goals. To make a significant amount of money, you need to put your existing capital into work by doing what’s known as investments.
While it may sound pretty simple, the actual process consists of a lot of brainstorming and research, which usually starts with picking a reliable investment source such as Stocks, Mutual Funds, a ULIP policy, bonds, etc. With that said, let’s take a look at some of the most favorable investment options available in India for wealth accumulation:
Making investments in the stock market is a great way to gain higher returns over specific periods. However, it requires a lot of research and analysis to find the right stock to invest in. Moreover, the returns you can generate with stocks also depend on how well you time your entry and exit in the market. The investment is also subjected to market volatility, but capital appreciation occurs over the long term. If you’re looking for an investment source that can help you beat the rate of inflation, stocks are certainly a good choice for you, provided that you have the required knowledge to invest wisely.
- Mutual Funds
Mutual funds are one of the most popular investment options in India that carry a moderate risk and promising returns. The general principle behind mutual funds is to accumulate monetary resources from multiple investors like you and reinvest them in funds on your behalf. You can find two major types of mutual funds in the market namely equity and debt. While equity mutual funds invest your capital in equity-linked financial instruments like stocks, debt mutual funds prefer investing in government bonds and papers instead. However, you can also find some unique mutual funds that provide hybrid benefits of investment in both equity and debt instruments. They’re one of the most popular types of investment options in India as they not only offer greater returns but also provide greater liquidity by allowing you to withdraw at any given time.
- Unit Linked Insurance Plans
ULIP Policy is a very trendy investment option available in India. With unit linked insurance plans, you can enjoy the combined benefits of both insurance and investments in the same policy. Additionally, these plans are also eligible for tax benefits, which makes them even more attractive to investors. These plans usually have a lock-in period of three to five years, after which you can easily withdraw your funds as per your requirements. There are various types of ulip policies available and you can even customize your investments based on your financial preferences and risk appetite.
Bonds are debt investment instruments available in India issued by different companies in return for your money. The issuer company also pays you interest on the principal amount you’ve invested as they’re required to repay the borrowed money with a fixed rate of interest on the borrowed capital. Presently, you can find several bonds that offer varying rates of interest.
- Real Estate
Investment in real estate refers to the practice of purchasing commercial or residential properties and allowing them to appreciate your capital with time. You can either enjoy a steady stream of income by leasing your properties or sell them later at a higher price. Either way, you can enjoy good returns by investing in real estate, especially if you have a large capital. It’s one of the most profitable sources of investment available in India.
- Recurring Deposits
Resonating fixed deposits greatly, the recurring deposits (RDs) allow you to invest a specific amount of capital every month for a specified time. Nearly all banks allow you to make investments in recurring deposits. These investments offer guaranteed returns when you’ve completed the tenure of your investment. If you’re looking for a completely risk-free investment with decent returns, a recurring deposit is a perfect choice for you.
- Public Provident Funds
The Public Provident Fund, abbreviated as PPF, is a long-term investment option that provides you a variety of tax benefits for maximum savings. These investments require a lock-in period of at least 15 years in which you won’t be able to withdraw your funds. Once you finish the lock-in period, you can either choose to redeem the benefits or continue for another fifteen years. The returns offered by a PPF are reconsidered by the government of India every quarter. Moreover, the withdrawal benefits are also free from any kind of taxation.
- National Pension Scheme
If you’re looking for an investment option to plan for your retirement, you should take a look at the national pension scheme offered straight by the government of India. It’s an ideal tax-saving investment scheme that keeps your funds locked in unless you retire from your profession. As compared to employee provident funds, the National Pension Scheme offers higher returns. However, the received benefits are subjected to taxes and you’re also required to purchase it through an annuity to receive a regular pension.
- Employee Provident Fund
Employee provident fund is also one of the most popular investment options available in India, introduced by the government. It’s an investment opportunity made specifically for working professionals looking to build a reliable source of income for retirement. The investment also offers tax benefits and you can also withdraw the funds prematurely in the event of any financial emergency.
- Bottom Line
The best way to make more money is by making the bucks work for you. There are a variety of investment options available in India that allow you to accumulate wealth and attain financial security. With the aforementioned options, you can easily get started with investing your capital and gaining returns out of it.