Check out the High Return Investment Options in India

You need to invest to grow your money. While there are various types of investment options to choose from in India, we need to keep in mind their age and their requirements for investment. 

This includes deciding if

  1. You want to invest for the long term or for a short term
  2. You want to  invest in risky or risk-free investments
  3. You want to check liquidity requirements in case of financial emergencies

You need to take into account these factors while selecting your investment avenue.

There are 2 baskets of investment options to invest in India in 2021

There are 2 baskets of investment options to invest in India in 2021

  1. 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
  1. 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.

The top investment options in India are:

Equity (Stock) Market

Investing in stocks directly is a high-risk and high-return investment. The stock market gives one of the highest returns in the Indian capital market. But they also come with a very high risk. The stocks as an asset class are highly volatile. It does not guarantee 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. 

Mutual funds:

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. It is one of the high return generating investments in India and is very famous among people who want to invest in the stock market but have no experience or education in it.

Real Estate

Real estate investing is investing in a house that is not used for self-consumption. This means the house you live in is not a real estate investment. The location of the property is one of the most important factors that determine the value of your investment. The return on investment is delivered through two key areas, rentals, and capital appreciation. However, real estate as an investment is highly illiquid and cannot be liquidated for emergency purposes.

Gold

Gold is another investment option in India in 2021. Possessing gold in the form of jewelry comes with its own risks such as safety as well as high cost including the charges for making gold. Although, nowadays investing in paper gold is a cost-effective investment yet a volatile and risky one.

Fixed Deposit

Last but not least is one of the most crucial and risk free investments. A bank Fixed Deposit is considered 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 offered 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 and can be 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 is said to have one of the highest returns with an interest rate of up to 6.75%. 

 

Hence, the Fixed deposit is one of the highest investment options in India with a guaranteed return. Mutual funds do have a little risk even though it gives high returns. The equity market is the one with the highest return but is not consistent and guaranteed. Real estate on the other hand gives high return but is not flexible enough and not helpful during emergencies.

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