Individuals belonging to the upper middle class earn an annual income of at least Rs 8 lakh. These individuals are wealthier than at least 60% of the Indians. We have covered the following in this article:

1. Public Provident Fund

Public Provident Fund (PPF) is a savings scheme offered by the Indian Government. It allows individuals employed even in the informal sector to invest in the scheme. Sovereign guarantees back the PPF scheme. Therefore, investments in PPF can be considered safe. The Indian Government offers a fixed rate of return on PPF accounts. The interest rate on PPF is revised regularly, depending on several factors. The PPF investments are locked-in for a period of 15 years. However, premature withdrawals are allowed on meeting specific conditions. One can invest a maximum of Rs 1.5 lakh a year while the minimum investment is Rs 500 a year. Since the investments are locked-in for an extended period of time, it is suitable for long-term requirements such as retirement and children’s life events such as higher education and marriage.

2. Hybrid Funds

Hybrid funds or balanced funds are a class of mutual funds that invest across debt and equity instruments. A few examples of debt instruments are government bonds, corporate bonds, treasury bills, among others. Equity instruments include shares and debentures of companies across all market capitalisations. The main objective of these funds is to balance the risk-reward ratio. The returns offered by these funds are attractive. Since these funds have equity exposure, they are an excellent option for long-term planning. Also, the port-tax returns are stupendous and outdo that of most of the other investment options.

3. Gold

Investing in gold is one of the traditional investment options. Gold is seen as one of the most secured investments and tangible options as the investors get to hold it physically. Gold is considered a hedge against market volatility and inflation or deflation. Regardless of what the market conditions are, investing in gold is always an excellent choice. The worth of gold never fades away completely. It may experience occasional fall but will never reduce to zero. Therefore, investing in gold will be a fruitful option in the long run. There are many alternatives to investing in physical gold. One may invest in gold mutual funds, gold exchange-traded funds (ETFs), and digital gold.

4. RBI Bonds

Until the year 2003, the Indian Government was issuing 8% savings bond, which was taxable. The 7.75% taxable bonds replaced it. These bonds come with a tenure of seven years. RBI bonds can be issued in both physical form and Demat form. If one wishes to receive these bonds in Demat form, then they can do so through the Bond Ledger Account (BLA). The investors are issued with a Certificate of Holding and this can be considered as proof of investments. These bonds provide assured returns over the investment tenure. Conclusion There are several investment options available for the upper middle class apart from the ones mentioned above. The investors must assess their requirements and investment horizon before deciding to invest in any.

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