Variety Of High Returns Investment Options.
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Risk and returns are highly correlated. The higher the risk, the higher will be the returns and vice versa. Therefore, while choosing investment options, you should always consider your risk profile. Understanding your risk profile will help you select investment options that match it. In other words, if you are a high-risk taker, low-risk investments may not earn you satisfying returns that you may expect. While, for a low-risk seeker, highly volatile investments will result in a restless life. They will always panic with the market movements. Therefore, identifying your risk tolerance levels is often the first step towards curating a good financial plan.
Best Investment Plans For High Returns
Stock Market
Usually investments made in the stock market have given a high rate of returns in a short time. However, it's a highly volatile market hence, one needs to have the knowledge of fundamental and technical aspects of the stock market before investing the money to reduce the risk of losing out on your hard-earned money. Also, it is suggested that if you make investments in large-cap or reputed companies then you have chances of growing your money in a time period of 5 to 7 years.
Mutual Funds
There is a wide range of mutual funds available in the market such as ELSS (Equity Linked Savings Scheme), debt-oriented mutual funds, equity-oriented mutual funds, balanced or hybrid mutual funds, etc. Though there is a risk factor in investing in mutual funds as the professional fund managers make investments in different companies/sectors and different types of funds. But, the return rate of mutual funds is higher in comparison to other investment instruments. Usually, the return rate depends upon the tenure of the fund. In the long-term, mutual fund investments can help you earn higher returns, subject to market risk and volatility.
National Savings Certificates
Backed by the Government of India, National Savings Certificate (NSC) is a fixed investment savings scheme. It is a savings bond that is available at all the post offices of India. If your investment appetite is not that large then it is one of the safest options for investment. NSCs have a fixed tenure of 5 years or 10 years, and the rate of interest is fixed. In addition to this, you get exemption on tax on investment of up to Rs 1.5 lakh. And, banks accept these certificates as collateral to avail a loan.
Corporate Deposits/Non-Convertible Debentures (NCD)
NCDs or corporate deposits are also good options to grow your money faster. Various NBFCs (Non-bank financial institutions) and corporates offer higher interest rates in corporate deposits and NCDs as compared to the fixed deposits of banks. Usually, the rate of interest on these deposits ranges from 8 percent to 12 percent. Various other benefits of NCDs include high liquidity through the stock market listing, tax exemptions at source and safety since these are issued by companies that have a good credit rating as per the norms of the Reserve Bank of India.
Kisan Vikas Patra (KVP)
Backed by the Government of India, Kisan Vikas Patra (KVP) is a savings certificate scheme that was launched for farmers but now is open to all. You can double your money in this scheme within a time period of 118 months which is equal to 9 years and 10 months. A minimum of Rs 1,000 is required to invest in the scheme, and there's no upper limit for investment. Also, the rate of interest and period of maturity are subject to change on the basis of the announcements made by the Ministry of Finance. Besides, the investments made in the Kisan Vikas Patra scheme are completely taxable but one can use these as collateral for securing loans.
Conclusion
To sum up, know your investment goal, investment horizon, assess your risk profile and choose a scheme that aligns with your needs. All safe investments do not offer high returns. For generating higher returns, you should invest in market-linked investments. Ideally, you should aim to have a good mix of investments (market-linked and fixed income) in your portfolio to generate significant returns. The best of both worlds will help you achieve good returns.
Also read- Learn About The Many Types Of Investment Avenues Available In India.
