Is a mutual fund is the best investment plan or should I look for other better options? Almost all people face such a dilemma when it comes to choosing a better investment plan that gives higher returns. There are so many investment plans are available in the market which eventually makes the task difficult for customers to choose the best one as per their requirements. Here, in this article, you will come to know about a set of best investment plans in India that will not give you higher returns but also ensure investment security. So, without wasting much time, let’s have a look at some of the best investment plans in India 2020.
The Best investment plan with high returns
There are a number of investment factors that must be taken into consideration such as how much return you can avail at the end of the maturity period, how secure an investment plan is and what are the benefits associated it. For choosing the best investment plan with high returns, you should first consider your investment horizon which will help you in selecting the best investment plan.
There are numerous investment options available that are suitable for both long-term and short-term plans and also facilitate tax savings. But it is important to check out which investment plan can better cater to your requirements or how you can move ahead with your investment plan in the future. Investment can be both financial and non-financial. Financial investments include money investment in banks, fixed deposits, mutual funds, and fixed deposits. On the other hand, non-financial investments include money that is invested in real estate, gold etc.
But before choose an investment option, it is important that you must consider all the important factors and then take a firm decision. Along with other factors, you should also consider the risk factor involved in it and then choose the best investment plan to go further. You should keep one thing in mind that returns and risks are proportional to each other which means for higher returns, you may have to take up higher risk.
Now let’s have a look at top 16 best investment plans with higher returns in India 2022
Mutual Fund investment
In today’s age, most people opt for mutual funds investment options. Although, it is true that it is a bit risky but mutual fund investment funds give a higher return on investment. If you would like to invest in the market but don’t have proper knowledge and experience in this, you can opt for this option as it is the best investment plan in this situation. These are basically market-related investments where money is invested in various financial fields such as equity, debt, stocks, money market funds and so on. In all these sectors, returns are generated as per the market situation and performance.
Also Read: Tips on Writing a Business Profile
Mutual fund investment plans have been classified into three broad categories such as – equity funds, debt funds and hybrid funds. Now let’s go into details –
Equity mutual fund:
Equity fund is a market-linked investment plan where 65% of the assets are invested in equity and thereby generate a higher return on investment by investing in the shares of companies with market capitalizations. Since the returns are higher, here the risk factor is also high.
Debt Mutual Fund:
Debt mutual fund includes a number of instruments that include corporate bonds, government securities, treasury bills, commercial paper, and other market-related instruments where the investment is made under a fixed interest rate. These plans are ideal for those who do not want to take up the high risk.
Hybrid Mutual Fund: Funds that are invested in stocks and bonds are called hybrid funds. These funds are absolutely ideal for beginners.
Public Provident Fund:
Public Provident Fund is a government-backed investment plan that helps its investors to enjoy a risk-free investment plan for a long period of time. In this investment plan, the interest rate is paid and revised by the government every quarter. The present interest rate of PPF is 7.9% and the maturity period of this plan is 15 years. However, the money in your account can be withdrawn initially after a period of 6 years. However, one can take a loan on the balance available on the PPF account.
Also, this PPF comes under the EEE category where the principal amount, interest earned and maturity amount are exempted from tax.
Bank Fixed deposit
If you are wondering which is the best investment plan in India for the middle class, then it can rightly be said that bank fixed deposit is the best investment plan which provides higher security. It is one of the traditional ways of investing money. Here the deposits are made in banks with a guarantee of offering fixed amount after completing a fixed period of time. As per the banking guidelines, the tenure of bak fixed deposits vary from 7 to 10 years. The individuals can choose tax saver deposit options available for a period of 5 to 10 years. While making investment in fixed deposit, the investor can choose options of either making cumulative deposit or making a non-cumulative deposit. The terms and conditions of both these options differ from one another. It is the best investment plan for 5 years.
Also Read: Tips on Writing a Business Profile
Investment plans with higher returns for senior citizens
National Pension system
Are you looking for a good retirement plan? If your answer is yes, then you have landed at the right place. The national pension system is one of the best government-backed schemes which allows investors to invest in various market-linked sectors such as debt and equities. The final pension amount depends on the returns from these investments.
The best feature of NPS is that it is backed by the Pension Fund Regulatory and Development Authority of India. It is open to all individuals between the ages group of 18 to 60. The individual can withdraw a partial amount from their account after completing 3 years.
It is one of the best investment options for salaried person. Recurring deposits are termed as term deposits offered by banks where the individuals are allowed to make regular deposits and earn a good return. It offers the flexibility of investment as the investors can choose the tenure of their investment plan. Usually, the tenure of recurring deposits vary from 1 year to the period of 10 years. They can open their RD accounts in their respective banks and proceed for every month deposit. This is the best plan for the salaried persons as the recurring deposit amount will be deducted from the salary every month. The interest amount is paid every month at time of the maturity of the Recurring deposit.
Senior citizen saving Scheme
This is a five-year saving scheme for the senior citizens of India. Under this scheme, the individuals above 60 years of age can make deposits or investment for the time period of five years. This is one of the best post office senior citizens schemes. The senior citizens can earn good interest rate. The current interest rate for this scheme is 8.6% and the time period of this plan can be extended up to three years.
This senior citizen scheme offers the highest interest rate compared to those saving schemes available in India. You can avail of this best investment plan through both public and private sector banks and Indian post office. Moreover, it is also one of the best tax savings scheme.
Unit Linked Insurance Plans
This Unit Linked Insurance Plan is a product offered by insurance companies that gives investors both the options – insurance and investment option under one integrated plan. The people who are looking for secure coverage of life plans and also want to earn a good return on investment can certainly opt for this best investment plan. The policyholders need to pay a yearly premium. Apart of this premium amount is used to provide insurance coverage, while the rest of the amount is invested in the plan.
Investment plans in commercial sectors
Gold ETF: Gold Exchange Trade or Gold ETFs are the instruments that basically work as stock and gold investment. These are mainly traded on the NSE national stock exchange and are buy and sell like other company stock. Gold ETFs are provided based on the gold prices which is transparent in respect of pricing. Although, it is true that since it is a market-linked product, it is a volatile plan in terms of risk. But they offer a higher return on investment.
Real estate: Real estate is said to be one of the fastest-growing sectors in the country. This is the sector that holds huge prospects in the field of commercial, housing, hospitality, manufacturing, retail, and so on. Real estate investments are the safest mode of investments that give higher returns in investment. Here, the risk involved is very low and the property prices change every now and then. However, it should be noted that it may get a bit difficult to sell a property if you are in need of emergency funding.
The property owner can liquefy his real estate assets. The investors holds the option to invest in both commercial and residential properties and avail higher return on investments. Investments in commercial real estate sector not only yields higher return on investment but also contribute in diversifying the assets.
Post-office monthly income scheme
This monthly income scheme offered by the post office India is said to be one of the best investment plans for the people. It is a government-backed monthly income plan that allows the subscribers to save or invest a specific amount every month. The maturity period of this plan is five years from the date on which an account is opened. An individual who is a citizen of India is eligible to open a post office monthly income account with a minimum rupees of 1500. It is a post office savings scheme.
But it should be noted here that anyone who is looking for a tax saving option cannot opt for this as this post-office monthly income scheme does not provide any tax rebate on maturity account or the investment.
Sukanya Samridhi Yojana: It is basically a government savings scheme which aims at saving a girl child’s future. This girl child should be 10 years of age or younger to create an account under this scheme. This comes in the list of best investment plan as here the interest rate is very high and tax deduction is also available. In case of twin girl child, the third account can be opened. The interest rate for this plan is fixed and it is reviewed by the government quarterly. The interest rate for the financial year of 2019-20 is 8.5% on compound interest.
Recurring Deposit: It is a plan for safe investments with high returns in India. It is the most suitable option for those who do not like to invest a lump sum amount, rather they want to invest on a monthly basis. You can either opt for postal RD or bank RD as per your choice. The banks generally offer RD for a minimum period of 6 years to maximum 10 years. The rate of interest received on RD is taxable.
Post Office time Deposit: It is one of the most well-known investment scheme offered by the Indian Postal Service. It offers an assured return on investment at the time of maturity. The individuals can opt for this plan not only in the post office but also in all public and private sector banks respectively. It has four tenure preferences – 1,2,3 and five-year deposits. The minimum deposit amount is rupees 200 and the amount in the account also should be in multiples. If this plan covers 5-year tenure, then subscribers can avail of tax deduction under 80C. Premature withdrawal of the amount is also allowed.
Also Read: Everything You Need to Know About Business
- Treasury bills
It is a government backed best investment plan. These treasury bills cover shorter maturity periods such as – 91 days, 182 days and 364 days respectively. These bills are used by the government for raising funds. The RBI auctions treasury bills on regular intervals. Since these are short-term in nature and help keeping money aside without facing market risk.
- Fixed maturity plans
These fixed maturity plans have minimum maturity tenure of 3 years and act like bank FDs. These are tax efficient and provide better returns than fixed deposits.
- Equity Linked Savings Scheme
This is the best investment plan which is by a tax saving mutual fund that invest a majority of their fund in an equity scheme. These investment plans come with a mandatory lock-in period of 3 years and offers tax benefit up to 1.5 lakh rupees per year.
It is an ideal investment option for those who are looking for tax saving option and also want to obtain higher return on investment. However, it is a risky product and the investors should always keep them updated in order to take the full advantage of this plan.
Therefore, this the list of best investment plans in India 2020 with higher returns. The investors can choose any one as per their tax benefit and interest rate so that you can avail of the best benefit out of the plan.