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Top Investment Options in India

At such time, when interest rates are heading negative x-axis & days of guaranteed return seem to be over. One’s strategy also depends on one’s investment goal and the ability to take risk. The higher the risk, the more return one can expect & vice versa. In such a situation, an investor might get confused about where to invest right! Keeping all this in mind, below 6 investment options have been filtered out of the bunch.

  • Equity- In the current scenario, equity remains the best option to opt out for. This is an attractive investment option for investors holding a long-term goal.

“Besides higher returns, equity offers you the advantage of instant liquidity and flexibility in terms of redeeming in parts as per your requirement. Also, if you opt the equity mutual funds route, you can invest even small amounts of money. SIP option makes it easy to invest systematically over a longer period of time as well as benefit from rupee cost averaging,” says Ashish Kapur, CEO, Invest Shoppe India Ltd.

  • Arbitrage & Income Schemes of Mutual Fund- For investors not having long term of investment goals or are not so comfortable with volatility & risk of market, arbitrage & income schemes of mutual fund should be considered. They do not offer any deposits but extends significantly higher post-tax returns.

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  • Tax-Free Bonds- For investors, who value safety over returns and plan to have a long term of investment goal, tax-free bonds are fairly attractive option. They offer returns that are higher than the bank deposits after adjusting the tax.
  • Public Provident Fund- Public provident fund (PPF) is amongst the safest and best investment options in India. Investing in PPF is risk-free as well being backed by the Government of India. Additionally, the interest earned is tax-free. The minimum annual investment amount is Rs.500 while maximum being Rs.1,50,000. However, investment could be made beyond this but that does not claim any tax benefit. The money gets locked for the 15 years and you can earn compound interest from this account.

mutual fund

  • National Saving Certificate- National saving certificate is a saving bond by the Indian government, primarily used for small savings and tax savings. NSC is a zero-risk investment options. It is the part of Indian postal service and has a fixed term of 5 years. The rate of interest is currently 7.9% compounded annually. Investment up to Rs 1,00,000 per annum qualifies for tax rebate under Section 80C of the Income Tax Act. There is no maximum limit for investment and the minimum limit is Rs 100. Saving certificates can also be used as collateral security to get a loan from banks. The interest received is taxable. NSC is a good investment option with low risk and for shorter investment horizons up to 5 years.
  • Company Fixed Deposits- Company’s FDs are a better investment options for who are willing to take some risk. The risk taking, later, is rewarded in terms of higher returns in comparison of the bank FDs.

At present the highest return offered by company deposits is close to 11% per annum.

However, these are not fully secured as are not backed up by the government. The rate of interest varies from company to company & in related to the creditworthiness.

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