Millennials! Smart Financial Planning Today Can Secure Your Future Tomorrow
June 22, 2021
Everyone wants to invest their monetary resources in investment options that allow them to gain good returns after a specific period, without the involvement of risk. A lot of people invest in financial schemes to fulfill their future financial goals.
There are numerous investment options available in India to achieve financial security but the one that will fit the bill for you depends on factors like your investment horizon, risk appetite, liquidity needs, and financial goals.
While everyone wants to invest in schemes termed as the best investment plans that offer great returns at low risk, not many are willing to conduct the adequate amount of research required for it. The harsh reality is that a high return and low-risk investment is exceptionally hard to find.
In a practical world, the risk associated and returns go hand-in-hand with each other, which means the more you take the risk, the higher the returns you can expect from your investments. Talking about investment options, they can be classified into two parts – financial and non-financial.
The financial asset market contains investment instruments like stocks, mutual funds, and other market-linked products. On the other hand, the non-financial assets include options like real estate, gold, and treasury bills.
With that said, let us take a look at some of the most promising and best investment plans in India that allow you to plan a financially secure future, along with the risk associated with them and the expected returns:
1. Unit Linked Insurance Plan (ULIP)
The Unit Linked Insurance Plans are considered as one of the best savings plans in India. These plans offer the combined benefits of insurance as well as investments. Moreover, you can also enjoy tax-saving benefits using these plans.
The lock-in period for these policies range between 3-5 years, and a part of your paid premiums will be used for insurance, while the remaining amount will be invested in market-linked instruments like bonds, debts, and shares as per your preferences.
With a good ULIP plan like the Canara HSBC Oriental Bank Of Commerce – Invest 4G Plan, you can enjoy great flexibility by choosing your desired investment bandwidth as per your risk appetite. This makes ULIP plans extremely safe and ideal for your capital.
2. Public Provident Funds (PPF)
Public Provident Funds are one of the most secure investment options for long-term capital growth in India. It is completely tax-free and offers all the returns, directly to you. PPF accounts can be opened through any of your nearest banks or the post office.
With a lock-in period of 15 years, you can earn compounded interest on your accumulated wealth, and also choose to extend it by five more years. The only shortcoming of a PPF account is that you can only withdraw your capital after 6 years of the lock-in period.
In case you require money before six years, you can take a loan from the balance in your PPF account, which, of course, will hog up some of your precious interest rates. At present, the interest rate offered by public provident funds is 7.60%.
3. Mutual Funds
Mutual Funds are one of the best investment plans in India that offer good returns for long-term investments. As it is also a market-linked investment, your capital is invested in several financial instruments like stocks, debt, equity, and a lot more.
The rate of returns will depend entirely on the market’s performance. Although it includes a higher risk than other investment options in the market, depending on your market-linked investment choices, it also offers better returns than some of the best savings plans in India.
The two major options to invest in mutual funds are equity mutual funds and debt mutual funds. While equity mutual funds invest your capital in market-linked securities, the debt mutual funds utilize your capital in fixed-interest securities like treasury bills and corporate bonds.
4. Direct Equity
Direct Equity investments are known to yield very high returns for long-term investments. Although a lot of investors consider it as a high-risk investment option, the returns offered by direct equity are comparatively higher than most other investment options available in the market.
However, to invest successfully in these plans, you need to consider several aspects like choosing the right security, specifying your entry and exit time, and a lot more. Moreover, before investing your capital, make sure you understand your desired equity properly.
As of now, the market returns for 1 year, 3 years, and 5-year are estimated to be 8, 13, and 12.5 percent respectively. To be able to invest in direct equity funds, you also need to open a Demat Account through your bank or brokerage service.
5. RBI Bonds
With a tenure of seven years, the RBI taxable bonds provide you a flat interest rate of 7.75% per annum. These bonds can be only deposited through the Demat account and are credited to your Bond Ledger Account later.
The minimum amount to issue a bond is Rs. 1000, and you’ll also get proof of the investment in the form of a certificate of holding. Moreover, as it is a non-cumulative option, you can use it to earn interest as a regular income.
On top of that, RBI Bonds also allow you to make reinvestments of your earned interest that makes it fall under the list of best investment plans in India. Therefore, make sure that you check this investment scheme out.
To make successful investments, you need to be mindful of your risk-bearing capacity. With the investment options and the list of savings plans given above, you can certainly invest your capital in the best saving plan and earn good interest.