Investing in India is not an easy venture, especially for someone who does not belong to the field of finance. There are very few resources out there and the ones that do exist are riddled with hard-to-understand lexicon and technicalities. Let’s try and examine some of the best investment options for the coming year:
Mutual Funds (Small-cap and Medium-cap)
Mutual funds are one of the most stable instruments for investment in India. They effectively counter the volatility of the economy by diversifying one’s investment portfolio. All you should do is research and find yourself a good investment firm which has a stellar track record. There are many investment advisories out there, but you should be looking for ones that have a long list of happy clients.
Such firms usually study the trends of the market carefully and hand-pick small-cap and mid-cap shares in companies that are bound to climb in the stock market. You also have the option of remaining a retail investor and picking out stocks on your own. However, if you wish to do so, it will require significantly more research and better understanding of the economy.
National Pension System
The major benefit of investing in a National Pension System is the safety of the investment since it is a government sponsored scheme. The assurance of getting a designated amount of pension ensures that the scheme is not affected by market volatility. Moreover, it also provides tax-saving benefits. Under section 80C, 80CCC and 80CCD, you can avail tax deduction benefits up to Rs. 1.5 lakhs. Along with that, you can also get an additional Rs. 50,000 tax deduction under Section 80 CCD (1B).
Another major benefit of the scheme is that it helps you start planning your retirement from an early age. Moreover, the investment management cost is quite low for NPS. For instance, at the current rate, a fund of 1 crore can be managed with an additional fund management charge of just Rs. 1000. Since your fund is locked in for a long period, you do not have to worry about market affecting the returns on your investment, making it an investment instrument you want to look forward to!
Fixed deposits have never been the most glamorous modes of investment in the Indian market because of lower interest rates. But, the 2018 budget made some hefty considerations for the tax exemption on interest returns paid by financial institutions. These considerations favour senior citizens more than anyone else.
As a senior citizen you can avail in a range of high FD interest rates being offered by institutions such as Bajaj Finance who also have a lot of pre-approved offers. You can learn more about your pre-approved offers here. If you wish to know the exact returns that you can gain on your investment in fixed deposits, you can know it through the FD calculator available on their website.
Public Provident Funds are a long-trusted instrument for investments in India because they are backed by the government of India. These funds offer an attractive rate of return and are good for investors looking forward to long-term growth. The interest generated from PPFs are fully exempt from tax under the 80C section of Income Tax. But again, PPFs are best for people looking to invest over a course of many years. If you want quick returns and easy access to money, PPFs are not for you.
Once again, property investment will see beneficial returns in the coming year. There are some new instruments being floated into the market as well such as REITs/INVITs. These instruments allow you to invest in large construction and infrastructure projects. Other than that, the classic method of buying property is always a safe investment. A good knowledge of the prices of property in your area of investment and the development of nearby projects is crucial to making profitable investments. Property is one such commodity that always returns a profit when sold with constant urbanization. However, it is a long-term investment that yields returns long after the seeds are sown.
Also Check: Bajaj Finance Fixed Deposit