Best investment plans in india in 2020
Many people earn money by several primary occupations but very few think of secondary source of income. Only pimary source is not sufficient in modern times to run our life comfortably but it must need to generate secondary source of income.
Keep in mind of our daily expenseses and future financial needs one need to choose between available investment plans. Many people solely depend on their salary and work timings restrict them to physically occupy another source of income. Hence, one need to have such plans to earn more money with available resources by continuing existing job.
Below are the listed best investment options available in India and they need to choose depend up on their financial capabilities and risk taking capacity.
1. Share market
if you are looking for high returns with moderate and high risk, share market is best option for investors. All listed shares will be traded in BSE/NSE and other stock exchanges in all working days. Share market majorly consist of IPO, Direct Equity Market, Mutual funds , Commodities, ETFs, Forex etc.
A. Direct Equity market
Investing directly in companies at your choice depends upon share price traded over stock exchanges in india. its like buying share of ownership at your share. All listed compnies will trade over exchange in secondary market and investor can buy and sell shares as per market price. Risk and return path is always high in this direct equity as face value of share will be very less in denominations and market value is tend to facluate due to various socio, economic and political factors. You can also invest directly during Initial public offer (IPO) where a company offers its shares to public.
B. Mutual Funds
Mutual fund is a pooled money from many investors and invested large sum in market as specified by investors.
Mutal funds are one of the best way of investing in share and bond market indirectly to mitigate risk and have a diversified portfolio. Mutual funds are subject to market risk and one having long term goal can opt this investment path. One of the major advantage in mutual fund is having professional fund managers as a part of Asset management company(AMC) and your money will be in safe hands compare to Direct equity.
Mutual funds gives scope for all types of investors where you can start with very less amount to rip the market benefits. Many regular income holder such as salaried person choses this as Mutual funds allow investments in installments popularly called Systemetic investment plan(SIP). You can invest whenever you want and also can be redeemed subject to scheme conditions.
Investors can choose among Equity Mutual funds, Debit mutual funds, Liquid and Exchange traded funds etc according to their risk taking capacity. There are many authorized distributors for mutual funds and you can also invest directly without any help of brokers.
C. Commodities & Forex
Commodities primary deals with economic sector produces rather manfacture products. It has seperate commodit exchanges to deal in the form of contracts such as future contracts, forwards contracts. These commodites includes Bullian market(Gold) and base metals such as bronze, silver, copper, lead, zink etc. It also includes agricultural produces wheat, cutton, cordamom, seeds, oils etc
Forext market primary deals with currency market to gain or loss with dirrences among the currency rates across the globe. This includes trading of currencies in a decentralized market for all listed currencies popularly called foreign exhange market
2. National pension system (NPS)
National Pension System (NPS) is a pension cum investment scheme launched by Government of India to provide old age security to Citizens of India. It brings an attractive long term saving avenue to effectively plan your retirement through safe and regulated market-based return. The Scheme is regulated by Pension Fund Regulatory and Development Authority (PFRDA).National Pension System Trust (NPST) established by PFRDA is the registered owner of all assets under NPS.
Objectives of the NPS
- Provide old age income
- Reasonable market based returns over the long term
- Extending old age security coverage to all citizens
Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years (as on the date of submission of NPS application) can join NPS. Initially this scheme was brought for government emplyees and eventually it opened for everyone.
NPS provides you two types of accounts: Tier I and Tier II. Tier I is mandatory retirement account, whereas Tier II is a voluntary saving Account associated with your PRAN. Tier II offers greater flexibility in terms of withdrawal, unlike Tier I account, you can withdraw from your Tier II account at any point of time
3. Public provident fund
PPF is a tax saving as well as mobilising savings scheme introduced by ministry of Finance. It similar to Provident fund but whole contribution is made by individuals only. This earns fixed interest rate on your contribution subject to minimum of 500 contribution made in several intervels. This interest is reviewed every year by the government. Currently its 7.1 % on PFF which is compounded annually. There is maximum limit per year amuonted to 150000 per individual. This fund is fully secured and has maturity of 15 years and there after you can extend another 5 year if you want.
Loan facility is also available after completion of 3 years from the first contribution. You can make contributions yearly , half-yearly, monthly etc. All the wealth accumulated and returns are tax free including interest. You can tax exemption in your income tax returns. For more details: Click here
4.Post office Saving schemes
Indian post offices also function like banks which offers many saving schemes which are guaranteed by central government. These are fully secured saving plans which offers moderate interest whichis compounded.
i. Senior Citizen Savings Scheme (SCSS)
ii. National saving certificates
iii. Kisan vikas patra
iv. Sukanya Samriddi scheme
v. Saving and Term Deposits
For more details click here
5. Unit linked Insurance plans (ULIP)
ULIPs are multiple purpose investment plan it includes insurance coverage as well as investment portion which is linked to market appreciation. Premium paid by investors will be pooled and invested in shares, debt and other investment plans. During the investment period investor will be covered under insurance against life along with assured sum.
Currently there are many Insurance companies that are offering ULIPs based on individual financial profile and regulate by Insurane regulatory and development authority (IRDA)
6. Bank fixed deposits
Bank deposits are the most used investment plan by many people who has surplus money wanted to earn guaranteed fixed interest for fixed period. These fixed deposits are offered by banks and comparing to saving account Fixed deposits earns more interest. However when compared to other investement options. Please tend to go for this keeping convineince and senior citizen deposit their retirement funds into this bucket to earn interest.
7. Real estate
Real estate is one of the most prominent option for people who can afford. Investing in property always brings appreciation over a period of time as land and properties are limited but demand will be increasing day by day. Having multiple properties will always ensure accumulation of wealth in certain period but affordabiliy and financ availability also important. another way investing in real estate in procuring property on rental and giving it for rental income.
Gold is the most preffered investment in india due to their customary needs as well as most liquidity in nature. There are many ways you can invest in gold Either buying phyical god or God ETF or Gold bonds.
9. Alternative investments
Apart from above conventional and regular investment options, Alternative investment funds are also gaining a path in india. Spciallin Venture Capital, Private partnerships, Real estate fund , SME funds etc.