Influencing Parameters | Financial Planning Strategies | Gold | Debt Mutual Funds | Fixed Deposits | Public Provident Fund | National Pension System | Senior Citizen’s Savings Scheme | Pradhan Mantri Vaya Vandana Yojana | Direct Equity | Equity Mutual Funds | Real Estate
If you want your money to work when you are not working anymore, you need to opt for the best investment plans in India. Sound knowledge of the right investment plan in India will allow you to maximize the net returns and this will help you make your money work for you. The right financial investments will allow you to gain the best monetary returns in the years to come. You can choose to invest in real estate, stocks, bonds, shares, fixed deposits, cryptocurrency, recurring deposits, PPF, and tons of other things as well.
The investments can be broadly categorized as quick investment schemes that may not yield a very huge return but will mature early and slow investment schemes that yield a good return but take a great deal of time.
If you are eying a huge income, you will need to invest a large amount of money for a long period. This is the best recipe to gain the right returns. One of the buzzwords when it comes to investment is the ‘risk’ factor. Some investments do promise a good return but they are risky. They may be subject to market risks and so you will need to understand the risk-return ratio and then decide whether or not you will like to opt for those investment plans in India.
Parameters To Keep In Mind When Choosing Investment Plans In India
When you want to choose the right investment plan in India, you will have to make note of several factors. Here we are going to share the key details with you. Make sure to assess these points as this will aptly guide you regarding the best investment decision.
Always remember that the guidelines and rate of interest are going to vary from time to time. This is why you need to be mindful of the details and it is important to assess several points. Let us see some of these parameters.
Don’t put all your money into volatile investments as these are subject to high risks. These can end up sabotaging your earnings and prove to be detrimental for you in old age.
There are different investments with variable returns. You should choose the right options that give you a good amount of return. Always make sure that you are opting for investments with considerably good returns.
Always opt for the type of investment which does offer some liquidity to you. You don’t want to tie up all your investment and lock them for a long period. So, always choose investments that do offer you liquidity. You never know when you may find an urgent need of cash and this is why you want at least some of your investments to offer liquidity.
You need all your investments to have the right compliance. The last thing you need is to find out that the investments aren’t approved or regulated. So, make sure you are following and abiding by all the rules and guidelines in a meticulous manner.
Cost and Value
Assess the amount of money you will be saving; the value it will give you as returns and the related details. This helps you plan your finances in the right way.
So, use these five factors to come to the right decision regarding the best ways you can aptly plan your finances.
The Key Strategies To Efficient Financial Planning
Here are some of the key strategies that you have to bear in mind as far as financial planning is concerned.
- The first step is always to study the market in thorough detail. You have to make sure that you are understanding the market well. Assess the stocks that are most likely to grow even if there is a market upset. These are mostly stable stocks that have good growth potential. They mostly carry minimal risk and so make for a somewhat safe investment choice.
- The active trading approach can be used but only if you are very active, ready to put in tons of effort, give most of your time, and have the right expertise and skills. This can help you make a lot of money.
- You can also choose to opt for value investing. This is a technique that allows people to look for stocks that are sold at a lower value. You can then choose to purchase them at a bargain. It is a fast-paced market and there is a significant amount of risk involved in this form of marketing.
- Another method commonly used is the buy and hold technique. You can choose to purchase stocks that seem to have good potential for growth. Now, hold these stocks for a good amount of time until you feel that the prices have shot up enough to sell them. If you can plan the entry and exit points correctly, it will allow you to make a very successful profit.
- Another common method is to opt for a core and satellite. They are a sub-type of buy and hold strategy. In this format, a large number of stocks from a single company are held and they are then broken down into different portfolios. This helps them in cutting down the risk.
- You can also use the tactical asset allocation method. The idea is to balance the portfolio by opting for a blend of stock, cash, and bonds. The idea is to cut down the risk substantially while increasing the overall returns that you will get. You, therefore, need to first perform asset allocation and then follow it with investment selection.
These are the best strategies you can use to try your best to get a good and smart portfolio of earnings. The right investment plan in India is critical to ensuring you have a huge pool of money when you are old and can’t work a lot.
Smart decisions in your youth will help you secure your tomorrow. So, know how to decide well and work right.
So, if you have made up your mind regarding the right investment plans in India that you should opt for, we are here with the right list for you.
Gold is one of the most common investment options for Indians, but most people tend to buy jewellery. They can wear it and as the value of gold keeps growing, the jewellery becomes an even more valuable asset. However, one common pitfall is that the making charges associated with gold are not a part of the investment. Different stores charge varied making charges. Some stores can charge up to 25 per cent making and even though the value of gold hikes, you lose the making charge when you want to liquify your cash and sell the gold.
So, a smarter solution as far as an investment plan in India about gold is concerned is to buy gold coins or paper gold. There are no hidden charges here and it is a lot more cost-effective too.
You can also choose to buy sovereign gold bonds and even gold mutual funds too. Both of these are likely to give you good returns in the times to come.
2. Debt Mutual Funds
If you want to opt for a fixed flow of returns, go for debt mutual funds. These are the low-risk items but you cannot negate the risk completely. Here, you end up putting your money into things like corporate bonds, government securities, treasury bills, commercial papers, and more. They will generate a fixed rate of interest. However, a lot depends on the skills of the mutual fund manager.
So, you should explore the different options and find the right funding choices to opt for.
3. Fixed Deposits
FDs or fixed deposits are considered to be one of the safest and risk-free options as far as investment is concerned. The return isn’t that high but if you want to secure your future and you don’t want to put your money into a risky investment, this is the right choice.
You can choose the period of investment as there are umpteen available options. Also, the interest plans vary considerably too. Some offer yearly interest while others may offer quarterly, cumulative, monthly, and more.
4. Public Provident Fund
The PPF is one of the best long-term investment plans. One of the reasons why it is such a preferred option is because it is tax-free. Another great benefit is that the interest is given in a compound interest format.
Also, you will get a sovereign guarantee on both the earned interest and the principal as well. This will make sure that your money will always be safe. If you are looking for a standard and safe investment scheme that will give you pretty good returns after a long period (15 years), the PPF is usually the best possible choice.
Most people who are looking for the right saving option tend to choose PPF as their first investment option. It is safe, tax-free, and offers smart returns.
5. National Pension System
The NPS is mainly a mix of different forms of deposits. These include but are not limited to fixed deposits, government funds, liquid funds, corporate bonds, equity and more. As the name suggests, this is a long-term investment and it mainly focuses on the money you will get post-retirement. This is why you need to decide well as to what amount you will like to invest in equities and that will govern the net amount you will get later on.
This whole system is managed by the pension fund regulatory and development authority.
6. Senior Citizen’s Savings Scheme
This investment method is only available for those who are above 60 years of age. It can also be availed by those who choose to retire early. Once you are above 60 years of age, you can choose to pick your savings scheme from the bank or the post office.
The initial duration for which you can have this scheme is five years but you can choose to extend it for another three years. You can choose to invest a maximum amount of Rs. 15 lakhs but the major disadvantage of this investment method is that the interest generated is fully taxable.
However, senior citizens do have the provision to claim the deductions.
7. Pradhan Mantri Vaya Vandana Yojana
The PMVVY is yet another popular investment plan in India. This scheme is presented by the government of India and is mainly aimed at those citizens who are above 60 years of age. It is a good investment choice and comes with a ten-year maturity period as well. It will generate a net interest rate of 7.4% per annum. The highest amount of money that you can invest in this scheme has been capped to 15 lakhs.
8. Direct Equity
This is a high-risk investment but if you have a sound knowledge of the market and how equity works, you may be eyeing a massive sum of money. This is sure to give you the best returns.
Always make sure to spend a great deal of time investigating the market in depth. You need to keep an eye on the stock and despite all of it, you have to know that there is no guarantee because the stock markets are very volatile and they can go up and down in the blink of an eye. So, you should make it a point to do the research and then analyse the amount of risk you are willing to take.
While sound planning is likely to be safe, be prepared to handle the loss, should it come. This being said, you can then choose to invest in direct equity and if all goes well, you might find yourself in a pool of money. The start and exit points with the equity remain the golden buzzing words you have to be mindful of.
9. Equity Mutual Funds
If you have a skilled equity mutual fund manager you will be able to cash on the earnings in the right way. Currently, SEBI has set some rules for mutual funds and to says that 65% of the equity mutual fund scheme needs to be invested in assets in equity and other instruments that are related to equity.
Once again, be sure that you are thoroughly assessing the market and doing it in the right way. The lack of a disciplined approach might end up in huge losses. Make sure to check out the details and assess every aspect with due diligence. The right investment and a sound methodical approach and planning may yield the best returns for you.
10. Real Estate
Real estate has always been a great investment source. The rates can go up and down sometimes but overall, it seems to be a good and safe form of investment. You will be able to get capital appreciation and this will allow you to push the overall investments and get the right returns as well.
You can also choose to rent out your property as this helps you in getting a good steady income. There is a lot of paperwork and legal rules and regulations that are applicable and this is sometimes the downside to property investment. Make sure to check out tax rules for rental income. You should check out the location of the property and the government clearance. The last thing you want is to invest tons of money and find out that the property is disputed. So, make sure to check everything and then choose the right property deals. You should assess the market well and settle on the right details to come up with good property deals.
This will help you make a sound investment.
So, these are the best investment plans in India. You can choose to opt for any or even a combination of these. Making the right investments ensure that when you retire, you will have a lumpsum amount of money even if you are not able to work anymore.