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Middle-class population in India is on the rise, thanks to the awareness among individuals who are lifting themselves out of poverty through their intelligence and hard work. They are not as rich to purchase whatever they want, and at the same time, they are not as poor not to afford anything. They are happy when they compare themselves with the poor but feel they lack something when they look at the rich. They are always in search of ways to make more money. We have covered the following in this article:

1.Public Provident Fund

Public Provident Fund (PPF) is a popular investment option offered by the government. One can invest up to Rs 1,50,000 a year while a minimum of Rs 500 a year is needed to be invested. It is covered under Section 80C of the Income Tax Act, 1961. A tax deduction of up to Rs 1,50,000 a year can be claimed, and this saves up to Rs 46,800 in taxes. PPF accounts offer assured annual interest and are backed by sovereign guarantees. PPF investments are locked-in for a period of 15 years. However, premature withdrawals can be made on meeting certain conditions. PPF is an excellent investment option for long-term financial planning.

2.RBI Bonds

The Reserve Bank of India (RBI) issued 8% Savings (Taxable) Bonds until the year 2003. After that, it replaced it with 7.75% Savings (Taxable) Bonds. These bonds come with a tenor of seven years. The investors can receive the bonds in Demat form and get it issued to the Bond Ledger Account (BLA). The investors are given a certificate of holding as proof of investment. Since the apex of the nation is issuing these bonds, they are considered a safe investment option.

3.National Pension Schemes

National Pension System (NPS) is a saving cum pension scheme. It is under the purview of the Pension Fund Regulatory and Development Authority (PFRDA). Investors can claim an additional tax deduction of Rs 50,000 over and above the Section 80C limit of Rs 1,50,000 a year by voluntarily contributing higher towards their NPS account. The minimum contribution for NPS Tier-1 accounts is now reduced to Rs 1,000 a year from the earlier Rs 6,000 a year. NPS invests across equity, bonds, deposits, among others. Investors are given the liberty to choose the amount of equity exposure they would like to have as per their risk profile.

4.Debt Mutual Funds

Debt mutual funds invest in instruments such as treasury bills, government bonds, high-rated corporate bonds, and other similar money market instruments. The main objective of debt mutual funds is capital preservation and generating steady returns over time. These funds are safer than equity funds as they are not exposed to the equity market. Also, these funds are an excellent means to park money for a long duration as they earn compounded returns which will make the investors wealthier.

5.Bank Deposits

Investing in bank deposits doesn’t entirely mean parking funds in a regular savings bank account. There is no example of anyone becoming rich by investing in savings accounts. To be rich with bank deposits, one must invest in fixed deposits or recurring deposits. Fixed deposits are for those having a considerable corpus to invest while recurring deposits are for those willing to invest a small sum on a monthly basis. Both fixed and recurring deposits provide a much higher rate of interest than regular savings bank accounts.

Investing in the right options is one of the ways in which an individual can become rich over a short span of time. However, one must carefully asses their risk profile and requirements before making any investment-related decisions.

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