Investing is an important part of the creation of wealth, which helps us to beat inflation to complete our financial aims and also to stabilize our financial future. Instead of allowing money to lay idle in your bank accounts, you can invest them in varied channels like stocks, mutual funds, FDs, and many more. In this article, we will discuss the various investment options that you can employ to navigate your money better.
The avenues of investment that you will be choosing rely on your financial goals, liquidity requirements, risk appetite, and investment horizons. Among all these, risk appetite is the most important factor to take into account especially in the present-day market scenario. With this in mind, let us discuss the varied investment options in India to navigate our finances better.
Best Investment Options In India
Regardless of your risk appetite, it is crucial to select the right equipment to increase your savings. To help you with that, here are the top 5 investment options that you can choose.
As equity investments that portray a share of ownership in an entity or company, stocks are among the best investment channels for long term investors. These stocks can be traded in a marketplace that is known as the “stock market” where all the trades are conducted electronically.
2. Fixed Deposits
For investors who are looking for attractive returns with the lowest risks, FDs are among the best channels for investment. By investing in an FD, the investor can receive assured returns at a fixed interval of time. This is among the most preferred investment options in India because of the flexibility and convenience that it provides. Even the investors that have a high risk appetite choose to invest in fixed deposits to diversify their investment and also for their portfolio stabilization. This is thought of as the best investment option in India 2021.
3. Mutual Funds
These are collective investment carriers that are managed by a fund manager who pools the money of the people and invests in bonds and stocks of varied companies and form a return. With the help of low initial investment, mutual funds are highly fluctuating investment channels that are ideal for medium risk investors. These are the best investment options in India for short-term.
4. Senior Citizen Savings Scheme
There are many government sponsored schemes for people above the age of 60, and one among them is the Senior Citizen Saving Scheme which is a great long term saving opportunity for the retirees. It is a good option to obtain secure and steady income and the senior citizens can get a high rate of interest that is idle for medium risk investors. This is considered a safe investment with high returns in India 2021.
5. Public Provident Fund
It is among the most common and trusted investment plans in India. It pays an annual interest rate and needs a minimum investment amount of Rs 500 per annum. It has a life span of 15 including partial withdrawals permitted at the corpus at varied points. This option also offers a steady and high interest rate as prescribed by the government from time to time. This is the best investment plan with high returns.
How Risk Appetite Affects The Choices Of Your Investment?
Most forms of investment hold some amount of risk and fluctuations which also impact the return. Generally return on any investment is higher when the risk on that investment is higher. However, there are high chances of losses in such channels of investment. Here are the different investments that are based on varying levels of risks.
- Low Risk Investment
Investors that have a lower tolerance of risk, asking for little or no fluctuations in their investment portfolio, search for low risk investment options. At times retirees who have spent decades forming a nest egg, fall under this sector. Fixed income equipment like debentures, bonds, fixed deposits, and saving schemes by the government fall under this section.
- Medium Risk Investment
Investors who are looking for a moderate level of risk but expect relatively higher returns as compared to the previous one search for medium risk investment options. These investments may have some level of risk, but the return received on these investments are also higher. Balanced mutual funds, debt funds, and index funds fall under this section.
- High Risk Investment
For the market savvy investors who have a deeper understanding of the securities and a high risk, tolerance capacity opt for investment options that include high risk. In these types of investments, there is no limit to the profits, but the risk level is also high. Fluctuating investment instruments like equity mutual funds, stocks, etc.
The Bottom Line
The safest investment options generally provide fixed returns. So from the list that we have mentioned above the safest option is fixed deposits where the investors will have to pay a certain amount and after a fixed period of time, they will receive their amount added with the interest amount. Other than that there are many other investment opportunities that the investor can opt for based on their risk appetite.