Since the COVID-19 epidemic began, the investment sector has drastically transformed. The post-COVID world of investing looks quite different from what it was before that. The most notable factor that has greatly influenced the field is the increased focus on well-being and wealth management. People all across the globe are considering a varied range of investment options in today’s time.
When it comes to the Indian market, investment options are endless. A market as dynamic, vast, and versatile as India is an excellent opportunity for any investor, no matter the scale of investment you may be planning. From stock market bets to insurance-cum-investment products, options are plenty and have a high potential for sustainable returns.
What To Consider Before Going For An Investment Option?
A common trend amongst most investors is the intention to get exceptional returns in the least possible time without losing the principal money. In the real world of investment, this is quite unrealistic. Ideally, the right investment plans and options would be a balance or combination of the risk and return factors.
The much-desired high-return and low-risk combination does not exist in an investment product. In general, the higher the returns, the higher the risk. Therefore, any wise investor would ideally match their risk profile with the risks associated with their chosen investment product as a primary step before making any investments.
There are generally two categories of investment products,
Financial assets:
- Market-linked products (stocks and mutual funds)
- Fixed income products (Public Provident Fund (PPF) bank fixed deposits).
Non-financial assets: Physical gold or real estate.
Some investment options carry high risk but can generate much higher inflation-adjusted returns than other asset classes over a long period. Then, some investments hold low stakes and consequently have lower returns.
Based on that, expert opinion, and market analysis, we have discussed the ten best investment options in India in the next part of this blog. These investment options are the best you have in 2022, considering the current Indian market and economy. Let’s check them out.
The 10 Best Investment Options In India In 2022
Savvy investors are always looking out for the best investment options. If you are one of them, we have made the job easier for you. Here are the ten best investment avenues in India right now.
Public Provident Fund (PPF)
PPF is a government-backed fixed-income scheme. It is a risk-free investment option with guaranteed returns over time. The most significant advantage of investing in a PPF account apart from your regular pension contributions is that it helps you save a lot of tax.
One can claim investment in PPF as a deduction under section 80C of the IT Act. Not just that, the accumulated principal and interest amounts are also untaxed during withdrawal. The approximate annual return of PPF is 7.1, and the time taken to double your investment would be around ten years.
Direct Equity
Or, in simple words, stocks. Equity investing is one of the most reliable ways to build wealth for long-term objectives. Numerous stocks have multiplied the investors’ wealth over time.
While the returns are pretty lucrative in stock investments, primarily in the longer term, the risks are also significant. You have to find the right investment plan and stocks to make an investment that offers good returns for you in the long term.
Equity Mutual Funds
If you want to reduce the risk of losing money, then diversifying your investments across multiple stocks is the ideal solution under professional guidance. It is when you can think of Equity Mutual Funds.
These are also primarily investments in stocks. However, the money is not just in 1 or 2 stocks but diversified across multiple stocks. There are professional fund managers who run such funds. It ensures lower risks and good returns on a long-term basis.
Gold
Indians love investing in gold, a popular investment option in the country for ages. However, buying physical gold would involve several extra charges, so buying gold through Mutual Funds and ETFs is a better option. Gold investments will not offer very high returns as equities in the longer term, but it is pretty risk-free and consistent.
Unit-Linked Insurance Plan (ULIP)
These are financial schemes that combine both life insurance and investment. To build additional wealth over the long term, a portion of the premium is in asset classes, including bonds or equity. The other part of the premium contributes towards a life insurance cover.
While the charges of ULIPs have lowered in the recent past, most still have a lock-in period of at least five years.
National Pension Scheme (NPS)
Another government-backed scheme, the NPS, is safe and straightforward and offers pretty good returns over the long term. Depending on the investor’s preferences, the fund may invest in stocks, bonds, treasuries, and other types of securities.
The lock-in period of this fund depends on the investor’s age, and it matures when the investor turns 60 years old. The accumulated interest of this fund is tax-free.
Real Estate
The one investment option that you cannot put out of any list. With a fast-growing real estate industry and a high demand in the market, the returns are incredible in the long term, and risks are minimal.
RBI Bonds
Another secure investment option with sustainable returns is Reserve Bank of India bonds. RBI Taxable Bonds come with a tenure of 7 years and have an interest rate of 7.75 per annum. These are available only in Demat mode and accredit to the investor’s Bond Ledger Account (BLA).
Gold ETF
Better than gold, but also riskier than gold investments are a combination of gold and stock investments. The Gold ETF can be bought and sold quickly with any company stock. Gold ETFs are usually passive on the premise of gold prices.
Bank Fixed Deposits
Last but not least, a popular and common investment option is bank fixed deposits. This investment option is risk-free and offers a sustainable return over time. They are available both as cumulative and non-cumulative options with interest rates ranging from 6.50% for regular account holders) to over 7% of senior citizens per year. Tenures of FDs can vary between 7 days to 10 years.
Final Thoughts
That brings us to the end of this blog, and if you are thinking of making an investment or making beneficial savings for long-term financial goals, then these are the best investment options you have in India right now. Make your decision after careful assessment and making all necessary considerations!