It is critical to invest in the right investment option to get decent returns on your hard earned money.It is well-known that earning is not enough, you need to save as well and in the current era, even that is not enough. People invest their money in different plans offered by different institutions to gain financial security or reach their investment goals. Plenty of questions might pop into your mind when you think of all the investment options available. Well, that being said, here are some of the best investment options available in the market in 2020 which will help you to make the most of your money.
Unit Linked Insurance Plans (ULIP) (ROI: 15.3% – 9.9%):
Unit-linked insurance plans are often thought of as one of the best investment options in India. These serve you by providing a reliable life cover along with a long term investment option. Besides, they also provide the benefit of tax exemption. Such plans have a lock-in period of 3 to 5 years. The premium paid is invested in the market, hence, you earn the market linked revenue and there also remains a fixed sum assured in case of death.
Public Provident Fund (PPF) (ROI: 7.9%):
This remains one of the safest as well as the oldest investment options to date offered by the Government. You would be glad to know that it is completely tax-free. You could open a PPF account in a bank or a Post Office. Your invested money would be locked for 15 years. Moreover, you would also earn compound interest on the accumulated sum. The only drawback remains that the option of withdrawal is available only by the end of the 6th However, you could always take a loan on the balance of the PPF account.
Mutual Funds/ SIP Plans (ROI: 10.25%):
Mutual funds remain the most luring investment options to date. They offer higher returns on long term investments. This is a market-linked investment procedure and invests the money in financial fields like equity, debt, stocks and so on. Returns generated depend on the market performance of the fund. Mutual funds offer higher returns than most other investment plans but the risk remains higher. There are two major types of mutual funds: Equity Mutual Fund and Debt Mutual Fund.
Equity funds are market-linked and provide high ROI since they invest in shares of companies having varied market capitalization. Though the risk involved is more, the returns are better. 65% is invested in equity and other equity-related schemes and rest are invested in debt and money market schemes. On the other hand, Debt Funds offer you a steady ROI. The money is invested in fixed interest-based securities like govt. securities, treasury bills, etc.
Bank fixed Deposits (Variable return rates):
Fixed Deposits continue to be the common man’s fixed income investment plan. It offers fixed returns throughout the entire investment period. You could have the returns payable monthly, quarterly or annually, as per your wish and the bank guidelines. You also get cumulative and non-cumulative investment options based on the bank. There is a range of tenures offered from 7 days to 10 years and the interest rates are pretty attractive as well, from 6.50% (regular account holders to more than 7% (for senior citizens) per year.
National Pension Scheme (NPS) (ROI: 8.5% and 11%):
NPS is one of the best government-backed investment options which provides pension solutions. It makes its investment in equity, bonds, government securities, etc. as per your preference. You are offered two choices under this scheme, auto and active. The auto option has the funds automatically invested in different assets while the active option needs you to invest according to your choices. The tenure would depend on the investor’s age since the fund matures when the investor turns 60. Under this scheme, the accumulated interest is tax-free. If you want a lump sum upon maturity, then 40% of the amount would be tax-free. If you choose to receive a pension upon maturity, the maturity proceeds would be taxable just like regular income.
Senior Citizens Savings Scheme (SCSS) (ROI: 8.7%):
This is a tax saving investment plan which is exempted from risks, available for senior citizens over 60 years of age. It offers a regular income and hence is one of the best investment options for senior citizens. The ROI is around a whopping 8.6% p.a. and that makes the scheme highly attractive. This is available throughout India at post offices and banks. The maximum amount you could invest is INR 15 lakhs. The holding period is 5 years and can be extended for another 3 years.
Direct Equity (ROI: 8% and 13%):
Direct Equity falls in the list of the best long term investment plans. Most of the investors have the idea that this is a high-risk investment option but the returns offered are higher than all other investment plans active in the market. You have to keep in mind certain aspects like picking the right stock and time your entry and exit in the market. As of now, the market returns for 1 year, 3 years and 5 years are about 8%, 13%, and 12.5%.
Real Estate Investment:
Real Estate is surely one of the fastest-growing sectors in India. It holds huge prospects in housing, hospitality, retail, and many more sectors. Investing in a flat or a plot has remained one of the best decisions among-st the investment options available in the market. The risk involved is also very low or negligible as the value of the property increases every 6 months. This is an asset that offers high returns over the long term.
RBI Taxable Bonds (ROI: 7.75%):
The RBI Taxable Bonds have a holding period of 7 years and they offer an interest rate of 7.75% p.a. These can be issued in Demat format only and are credited to the Bond Ledger Account (BLA) of the investor. Bonds are issued for INR 100 and the investors also get a Certificate of Holding as a proof of the investment. You can avail of the interest just like your regular income if you choose a non-cumulative option but the cumulative option would re-invest the interest. Hence, these bonds have become one of the best investment schemes in India.
Gold ETF (ROI: 6% – 7.5%):
Centuries have witnessed that gold is not only one of the best but also the oldest and evergreen investment options in India, as its value increases rapidly. You could go for a gold deposit scheme, gold ETF, gold bar, gold mutual fund among others. These will benefit you in a short time.