Investment is a necessity to grow your money for the future. While there are various types of investment options to choose from in India, one should keep in mind their age and their requirements for investment.
This includes deciding whether
- To invest long term or short term
- Invest in risky or risk-free investments
- To check liquidity requirements in case of financial emergencies
You need to take into consideration these factors while selecting your investment avenue.
There are 2 baskets of investment options to invest in India in 2021:
- Financial Assets that can be further separated into
- Market-linked products like stocks and mutual funds.
- Fixed income products such as Fixed Deposits provided by the banks
- Non-Financial Assets that consist of physical gold and Real Estate
While choosing an investment plan from the various investment options, it is critical to match the risk profile of the investor, that is, you with the related risk of the product.
You should know the top investment options in India right now while looking for the best investment option.
Equity (Stock) Market
The stocks are a highly volatile asset class. There is no guarantee of return over a certain period of time as it is difficult to time your entry and exit in the stock market. You need to have a lot of research and skills to understand the behavior of the stock market to predict patterns and to buy the right stocks. Investing in stock is therefore not everyone’s cup of tea. The only good part about investing in stocks is that they are able to deliver higher than inflation-adjusted returns compared to all other asset classes.
With the coming of fintech apps which let you invest with simple steps. It has become easier than ever before to invest in stocks.
But once you learn and crack the stock market behavior with sufficient experience, you will be able to make lots of money and actually become rich. Hence, you should invest in the equity stock market to get rich if you are willing to take the risk and also spend enough time to learn about the stock market.
7.75% GoI Savings Bond
Government savings or G- Sec bonds have replaced 8% savings bonds. These GoI Savings bonds were launched in 2018. The investors get an annual interest at 7.75% interest rate. You can invest a sum as low as Rs 1,000 in these bonds.
National Pension System (NPS)
The National Pension System is a long term investment product that is focused on retirement. It is managed by the Pension Fund Regulatory and Development Authority (PFRDA). It is a mixed bag of investment options containing equity, fixed deposit, corporate bonds, liquid funds and government funds among others. The decision of investing of how much to invest in the National Pension Scheme involves analysing your risk appetite for the same.
Mutual funds are an investment option where a fund manager manages your account by investing your money in stocks and bonds based on their experience. In an actively traded Mutual Fund, the returns are largely dependent on the ability of the fund manager to generate returns by investing the client’s money in equities and bonds.
Last but not the least is one of the most important investments. A bank Fixed Deposit is consider a safe investment option with the least amount of risk and highest form of liquidity. A fixed deposit is an investment of your savings to earn a higher rate of return than a regular savings account. It is offer by banks and NBFCs (Non Banking Financial Companies). A fixed deposit has the lowest risk in the portfolio of investment.
Money is invested in a fixed deposit with a lock in period and interest. Is given either at the end of the maturity date or as a regular payout. Investing in Fixed Deposit is a very smooth process can done at the tip of your fingers. You need to go through Fixed Deposit schemes of different banks. And select the one as per your needs and requirements. Bajaj Finance Fixed Deposit said to have one of the highest returns with an interest rate of upto 6.75%.
These are some of the best investment options in India in 2021. To grow your money with easy liquidity and guaranteed returns with less risk. A Fixed Deposit is the best investment option of all.