Investment is the dedication of an asset to attain an increase in value over a period of time. Investment requires sacrifice of some present asset, such as time, money, or effort.
If you sacrifice and invest now you can expect the produce earnings in future.
Two types of investments one is investment for production and other is purely financial investments.
Benefits of Investment -
Making Investment at sound place or organization and make your savings grow faster.
* First understand your net balance or net worth and see that how you can improve it further.
* Make a Perfect planning of how to invest your money at right place.
HERE ARE SOME OF THE TOP OPTIONS TO INVEST YOUR MONEY
1. Public Provident Fund (PPF)
One of the most secured long-term investment option amongst all the investment options in India. It is tax-free. A PPF account can be opened in a bank or post office. The invested money is locked for the tenure of 15 years. Moreover, in this investment option, you can earn compound interest on the accumulated money. It is low risk Investment option where you get retirement benefits.
2. Mutual Fund
One of the prominent investment options in India- mutual funds is the ideal investment plan that offers high returns on the investment over the long term. It is a market-linked investment alternative, which invests money in various financial instruments such as equity, debt, stocks, money market fund, and much more.
The two major investment options offered by mutual funds are:
A) Equity Mutual Fund: Equity funds are market-linked securities. Being one of the prominent mutual funds in India, equity mutual funds offer high ROI by investing in shares of companies of different market capitalization.
B) Debt Mutual Fund: Debt funds are considered one of the best investment options for investors who want to gain a steady ROI. Under debt fund, the investment is made in fixed-interest securities like corporate bonds, government securities, treasury bills, commercial paper, and various other money market tools.
3) Deposits in Bank
The other best option for investment are Banks. There are Cumulative & Non Cumulative option of Investments depending upon Bank .In this profits are paid monthly or quarterly according to the rules of the Bank.
When it comes to the non-cumulative option, as per underwriting the interest will be paid and on the other hand, the interest will be re-invested and will be paid at the maturity within a cumulative option. This makes it one of the best investment options in India.
4. Direct Equity
Direct equity is considered as one of the best investment options for a long-term period. Even though most of the investors consider direct equity a high-risk investment options, the returns offered by direct equity funds are higher than any other investment options available in the market.
When it comes to investing in direct equity investment plans, it is prudent to consider certain aspects such as picking the right stock, time your entry and exit in the market.
5. Investments in Real Estate.
Real estate investing refers to the purchase of property as an investments to generate income rather than using it as a primary residence.
Investment in Real estate is one of the fastest emerging option to grow you money. When you invest in real estate, you’re buying an income stream. And real estate investing has several advantages compared to some other investment opportunities.
It’s important to find a way to divorce your time from your income, at least part of your income. There are only so many hours in the day and you can’t be at work for all of them.
6) RBI Bonds
The RBI Taxable Bonds have tenure of 7 years and offer an interest rate of 7.75 per annum. These bonds are furnished in Demat mode only and are accredited to the Bond Ledger Account (BLA) of the investor.
The bonds are issued for Rs. 1000, and as proof of the investment, the investors get a Certificate of Holding.
With the non-cumulative option, the interest can be accessed as regular income, on the contrary, the re-invested interest is offered within the cumulative option. This makes these bonds one of the best investment options in India.
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Types of Investment Options
A) Investments with High Risks
In this you receive fixed of Income even if there is change in Economy or Business. Low risk Investments like Debentures, bonds, and fixed deposits come under this category
B) Investments with Medium Risks
Balanced mutual funds, debt funds, and index funds fall under this category. Even though medium risk investment options have an element of stability and debt, but their market-linked volatility can hamper the principal amount.
C)Investments with High Risks
Equity mutual funds, stocks of companies, derivatives, and even stocks come under this category.
Although you can get high income from this options it is important to when one should invest money in the volatile market and when they should stop and withdraw money with high returns.
7) Large Cap Mutual Fund
Another option of best investment plan for 5 years, large-cap mutual funds majorly invests in stocks of large business organization intending to gain maximum profit in a short period. This lucrative short-term investment option can provide quick and smart returns to the investors with tenure of 3-5 years.
8) National Pension System (NPS)
NPS is a pension scheme that is portable across jobs and locations. You do not have to change your fund while changing your job or city.
The additional benefit is that you get returns from equity and debt investments as compared to PPF where you invest only in the interest-earning instruments.
All your contributions up to Rs. 1.5 Lacs into Tier I capital are exempted under section 80C. Apart from that, you can claim any additional self contribution up to Rs. 50,000 of tax benefits under section 80CCD(1B).
So here you can save Rs. 2 Lacs of tax.
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