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People invest their money for generating wealth and earning returns. You can invest money for financial security, or earning an additional income in the form of interest. But which investment avenue is likely to be most profitable?
We have compiled a list of top 10 types of investment for you in 2020. Choose the one that best fits your risk-profile and needs.
Fixed Deposits:
Do you want to invest money with maximum security and minimum risk possible? If yes, then fixed deposit is one of the best financial investments for you. You can invest a certain amount depending on the bank requirements. In return, you are guaranteed a definite amount after a fixed period.
Mutual Funds:
Mutual funds are quite popular among investors because they provide higher returns than most other investment options. There are three type of investment funds- equity, debt and hybrid mutual funds. Amongst these, equity funds give you maximum returns but carry higher risk. Debt funds are typically safer as they balance out the risk with the returns. Hybrid funds are a mix of both types of funds.
Unit Linked Insurance Plan (ULIP):
This plan offers life insurance coverage, along with the option to invest. You will have to pay a monthly or yearly premium in this scheme which is split into an investment element, and one that goes towards life insurance coverage. You can also save on taxes with ULIP. If you want to invest for long-term, along with life coverage, this plan is perfect for you.
Recurring Deposit:
This is one of the low-risk options that you can go for. Recurring deposit is ideal for you if you prefer significant returns over a short term. You can invest the money in monthly instalments. You receive the money, along with the interest amount after completion of the investment period.
Direct Equity:
If you are looking for a long-term investment, direct equity is an excellent option. You can directly buy the shares of a company and keep track of its gains and losses. This is typically for those with a stock market know-how and a high-risk profile.
Public Provident Fund (PPF):
This government-authorized scheme offers both security and long-term returns. This type of investment extends up to 15 years. You do not have to pay taxes on the returns. The interest is paid per annum, and you can extend your account for five more years after the completion of the 15-year tenure. This scheme also offers you the option to withdraw your amount after seven years.
National Pension System (NPS):
The National Pension System is a sound and zero-risk scheme that will keep you covered after retirement. Anybody between 18 and 60 years of age can invest in this and will receive a pension sum after completion of the fixed tenure. Withdrawal of partial amount is also possible after three years.
Senior Citizens’ Savings Scheme:
This investment scheme is different from National Pension System because it allows only senior citizens aged 60 and above to open an account. It is available for five years only, unlike NPS. However, the interest rate is as high as 8.6%, and it also offers tax rebates.
Real Estate:
An investment in real estate tends to appreciate with time. It is for those who can afford to invest a significant sum and wait for appreciation over a longer term. Since property prices tend to increase, you stand a chance to earn substantial returns on your investment. You can either rent out your property or purchase or sell it at a much higher rate. Either way, it is a profitable investment.
Bullion:
Bullion is different from other types of financial investment in the sense that the assets here are metals like gold and silver. There are two types of bullion investment available in India at present- the Sovereign Gold Bond and the Gold ETF bond. You can either invest in gold coins and bars or purchase paper units representing gold.
Study about the different types of investment avenues available for you thoroughly before you invest. You can also consult a financial planner to guide you with your investments.
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