Whether it is a medical emergency or any financial catastrophe, savings can come as a knight-in-shining armour for you and your family in the most difficult times. But your monthly paycheck alone doesn’t have to be the sole contributor to your life savings. Your investment portfolio can contribute too. In fact, it can contribute significantly.
Most people refrain from investing because they want to maintain their savings. However, the truth is wealth generation is an integral aspect of life savings. There’s no better way to generate wealth than investing your money in the best investment plans in India.
Whatever your risk appetite is, high or low, here’s a list of the best investment plans in India to multiply your wealth.
1. Systematic Investment Plan (SIP)
Systematic Investment Plan, also known as SIP, has often been regarded as the best investment plan in India. That’s because it is one of the safest and return yielding investment plans.
How Does SIP work?
Systematic Investment Plan is a long-term investment plan where one has to invest a fixed sum every month for years. This invested sum is then allocated in mutual funds. The benefit of SIP doesn’t only come from market returns but the power of compound interest.
Risk Type: Low to Moderate
Suitability: Young, salaried individuals
2. Unit Linked Investment Plans (ULIP)
Unit Linked Investment Plans is a financial instrument that bears characteristics of both life insurance and investment.
How Does Unit Linked Investment Plan Work?
Once you buy ULIP, you pay monthly premiums. A part of this premium is paid as investment premium, and the other portion of it is used for investment upon maturity, the policyholder gets market-linked returns given that they survive the term. In an event of the unfortunate demise of the policyholder, the fund value or the sum assured, whichever is higher is paid to the nominee.
Risk Type: High
Suitability: Any individual open to market risks
3. Mutual Funds
As the name suggests, mutual funds are investment optionsthat offer market-linked returns. You can choose to invest a sum of money either in equity or in bonds, according to your risk appetite.
How Do Mutual Funds Work?
Mutual funds are similar to SIPs, the only difference is that Mutual Funds demand lump-sum payments. A mutual fund is a common investment instrument that is devised whenfunds collected from multiple investors are invested in bonds or stocks. The fund is managed collectively to earn the highest returns. Mutual funds are managed and organized by fund managers who put your money in different financial assets.
Risk: Both high and low, depending on the type of investment asset
Suitability: Everyone
4. Public Provident Fund
Public Provident Fund is a tax saving and investment instrument that offers additional returns in terms of interest earned. PPF allows a maximum investment of Rs. 1.5 lakhs, which can be made in a lumpsum or monthly. It has a minimum tenure of 15 years. The amount or the fund balance can be withdrawn upon maturity. It can even be withdrawn prematurely, up to a maximum of 50% of the fund.
How Does PPF Work?
Public Provident Fund is one of the best investment plans in India. One is required to open a PPF account with a bank or post office and deposit money every year (minimum Rs 500) for the account to be active. The fund value, with added interest and returns, is paid back to the account holder on maturity. The interest earned is exempted from tax.
Risk: Low
Suitability: Salaried Individuals
5. Max Life Savings Advantage Plan
You can also invest in private investment plans in India. One such plan is Max Life Savings Advantage Plan. Max Life Savings Advantage Plan helps you build a corpus by developing healthy investment habits.
How Does Max Life Savings Advantage Plan Work?
The investment plandemands regular payment of premiums. This is one of the best investment plans in India that promises guaranteed additions during the policy term and at maturity (5.5% of the sum assured at maturity for the first five years, and a 110% guaranteed sum assured on maturity with accrued bonuses.)
Risk: No Risks
Suitability: Anybody with an income
Conclusion
Whichever investment option you choose, ensure that you become a smart investor. Don’t fall prey to obscure investment schemes that offer high returns with minimal investment. Keep yourself enlightened about the do’s and don’ts of investment, regardless of which investment option you select.
Source: https://www.sebi.gov.in/sebi_data/investors/assistance/do-donts/english.pdf
