What are the Best Investment Options in India Based on Your Income?
Updated On Sep 25, 2023
In today’s time, it is not enough that you are just earning. You should have a substantial amount of savings as well to meet your future goals easily. To do so, it is best to start investing as soon as you are financially independent. So, if you are looking for some of the best investment options in India, then you have landed at the right place. Read on to find more.
Table of Contents
What is Investment?
Investment plans are a type of financial product that helps you multiply your savings. With the help of investment plans, you inculcate the habit of disciplined savings. So, even if your earnings are low, you should at least invest a small amount of your earnings in the best investment plan.
Best Investment Options in India
Listed below are some of the best investment options in India that you can consider:
- National Pension Scheme: The National Pension Scheme or NPS is one of the best investment schemes in India. It is backed by the government of India and is regulated by the Pension Fund Regulatory and Development Authority or PFRDA. The amount generated out of NPS can be used for creating a corpus for your retirement. Moreover, there are two types of NPS accounts - Tier I and Tier II. This is suggested for those with an average income.
- Public Provident Fund: The Public Provident Fund or PPF is another investment scheme that is backed by the government of India. This type of plan is recommended for those who have a lower-risk appetite and for an average-earning individual. The PPF scheme comes with a lock-in period of 15 years and is best for meeting long-term goals. You are eligible for partial withdrawals from the PPF account after 5 years. It also offers tax benefits as specified in section 80C of the Income Tax Act of 1961.
- Fixed Deposit: A Bank fixed deposit or FD is another type of investment that offers a safe haven to investors. You can invest a lump-sum amount in a fixed deposit, and earn great returns in the long run. The best part about investing in fixed deposits is that there is no risk involved in this type of plan. This means that if you have a low-risk appetite, you can easily invest in bank fixed deposits. However, you must check the interest rate of fixed deposits, as the interest rates vary from one bank to another. It is however important to note that you can withdraw money until the policy term is over.
- Unit Linked Insurance Plan: Unit Linked Insurance Plans or what is also called ULIPs is a high-risk investment plan and is thus recommended for high-earning individuals. It is one of those plans that offers the benefit of both insurance and investment. Some part of the invested amount goes towards insurance and the remaining is used for investment.
- Gold: Gold is another type of investment option that has been considered a safe haven since time immemorial. Along with physical gold, you can now invest in digital forms of gold such as gold ETFs, gold sovereign bonds, and many more.
- Systematic Investment Plan: Systematic Investment Plans as the name suggests are one of those investment avenues where you can invest in a systematic manner. This plan is recommended for all kinds of earning individuals as the minimum amount with which you can start SIP is as low as Rs. 500. There is however no cap on the maximum amount invested. You can use a SIP calculator to get an estimate of the returns you will get on investing in SIP.
How to Select the Right Investment Plan?
Listed below are some of the tips in which you can buy the right investment plan:
- First and foremost, you need to analyse your budget and only then proceed with any kind of plan. You should also evaluate your future goals as in what you want to achieve with the invested amount. Based on your budget and requirements, you can but the right plan for yourself.
- You should also do proper research before buying any kind of plan. On comparing the different options available, it becomes easier to understand which of them best suits your requirements.
- Once you have invested, you should also review your investments regularly.
- You should also invest as soon as you are financially independent. This is because the sooner you invest, it becomes easier to create a large corpus in the longer run.
Thus, based on your earnings, you can pick any of the above-listed investment options. For more details, you can also contact us at InsuranceDekho to invest in the best investment plan.