As an investor, you have a plethora of options to invest in India. There are government-backed schemes such as EPF, PPF, NPS, and so on; these are considered safe investment options as sovereign funds support them. Apart from that, there are options such as FDs and RDs, and these are as safe as the government-backed schemes.
Traditionally, the Indians are conservative investors, and they generally don’t prefer investing in risky investment options. However, the trend is changing of late. Stock markets, mutual funds, and corporate bonds have become a viable investment option in India. Following are the list of investment options in India that offer excellent returns:
1.Direct Equity Investment
Stock markets offer the highest and inflation-beating returns. High return investments come with high risk. Stock markets can be volatile and investing in stock markets is not apt for everyone. You need to ensure that you don’t invest your emergency funds in stock markets. Equity-linked investments are suitable for those who stay invested for a long time. To invest in direct equity, you need to have a demat account, and you can place your trades only through the authorised stockbrokers.
A mutual fund is formed when the capital collected from various investors (both individuals and institutions) is invested in purchasing capital assets such as company shares, corporate, and government bonds. Mutual funds are broadly classified into equity funds, debt funds and hybrid/balanced funds, depending on the extent of equity exposure. Equity-linked savings scheme (ELSS) is the only type of mutual funds that are covered under Section 80C of the Income Tax Act, 1961.
The Indian Government replaced the preceding 8% savings bonds with 7.75% saving bonds in 2003. These bonds come with a tenure of seven years. The RBI bonds are issued in dematerialised form and credited to investor’s Bond Ledger Account (BLA). The investors would receive a holding certificate as proof of investment.
Bank fixed deposit (FDs) is one of the most popular investment options in India. The first investment option that an Indian would think of when having a lump sum to invest is FDs. FDs offer much higher returns than a regular savings bank account. Senior citizens are offered a slightly higher rate of interest. Recurring deposit is an alternative of FDs to those who don’t have a lump sum to invest. RD is for individuals who wish to invest a fixed amount regularly. Like FDs, RDs too offer a much higher rate of interest than regular savings bank account.
Indian real estate is enthralling of late. India has seen tremendous industrial growth over the last three decades. The job market in big cities such as Delhi, Mumbai, Bengaluru, Pune, and Hyderabad attracts talented youths who are in search of employment opportunities. This has resulted in skyrocketing of real estate prices. Investing in real estate in major cities has become an extremely lucrative option.