An increasing number of individuals across the country are starting to invest money to get good returns with the hope that their money will grow over a while. If you thought about where to invest money to get good returns so, there are a few important points to consider.
First things first, you will have to ascertain whether or not you have enough funds for the present. While it is important to make sure that where to invest money to get good returns? Make sure that you make the right number of sacrifices and don’t compromise too much of your presence in the hope that you will have a great future.
The next most important thing to consider would be emergency money and where to invest money to get good returns. Since most investment instruments are granted against lock-in periods, the funds invested cannot be withdrawn until the completion of said period.
Before making any investments, it is advised that investors set aside some funds as emergency money as it can come in handy in times of unforeseen emergencies like medical or other expenses.
Clearing off your debts is another important step to take before investing money to get high returns. Unless you are free of debt, making investments can be a risky endeavor so you have to know that where to invest money to get good returns in India. Having debts will make it harder for you to manage your investments, making it essential to clear off all credit card dues and loans before putting your money into an investment instrument to invest money to get good returns.
In case you have no debts to your name and have also managed to set aside funds for emergency purposes, you are set to invest money to get high returns.
Where to Invest Money to get Good Returns in India?
Here are some of the options you can consider to derive that where to invest money and where to invest money to get good returns in India.
1. Stock Markets
Investing in the stock market is the best option to invest money to get good returns and it means that you can contribute to any company’s capital provided it is listed on the stock exchange. A company’s equity can be purchased by buying its shares, and the price of said shares will rise or decline depending upon the company’s financial performance. Investors are in for-profits if the company from which the equity was purchased also makes profits.
The most important thing to remember when investing in the stock market is that you are going to invest money to get high returns are possible only if the investor is extra careful when choosing the stock in which he/she wishes to invest. Stocks that come with low beta value are a better bet as the rise or decline in stock prices will depend upon how the market fluctuates. Stocks are high-risk and high-return investment options where to invest your money.
2. Mutual Funds
Investing in mutual funds means that your funds will be put into a group of investment options for where to invest money to get good returns, primarily bonds and equities. Since your investments are diversified when invested into mutual funds, it is considered a much safer option in comparison with investing in individual shares in the stock market.
Another great factor about investing in mutual funds is that the funds are managed by well-trained and skilled banking professionals who are in a better position to handle investment portfolios than regular investors. Mutual funds are professionally managed investment portfolios, where several investors, who share a common investment objective, come together and invest as one unit. It allows investors to pool their money to invest in stocks, bonds, etc.
Each investor owns units of mutual funds and it represents the portion of total holdings. Mutual funds are a medium-risk investment option where to invest money to get good returns. Some of the popular mutual funds are index funds, equity funds, debt funds, etc.
3. Fixed Deposit
A fixed deposit is a financial instrument issued by banks or NBFCs, providing higher interest rates than a savings bank account. If you have a lump sum amount to invest for a fixed period and fixed income then a fixed deposit is the best investment option. FDs are the most preferred investment option where to invest money to get good returns.
4. Money Market
Fund Money market fund is a type of debt mutual fund which invests in highly liquid instruments for less than a year. They generally offer higher returns than fixed deposits but face credit risks.
Things to Consider before Investing Money to Get Good Returns in India?
For most of us, figuring out where to invest money to get good returns can be a real challenge especially since the market is full of so-called money-making investment avenues and almost every other person is a market expert.
To help you decide where to invest money to get good returns, we have shortlisted the best investment options available in India in 2022 for you!
But before deciding where to invest money to get good returns you need to answer the following questions:
- What are your financial goals?
- What is your risk profile?
- What is your time horizon?
1. What are your Financial Goals?
It is essential to define your financial goals as it plays a major role in deciding where to invest money to get good returns For example:
- Mr. Ajay wants to buy a car in the next 1 year and he wants to accumulate Rs 2 Lakhs towards the down payment. This is a short-term goal to invest money to get good returns.
- Mr. Deepak wants to accumulate Rs 2 Crores in the next 15 years for his retirement. This is a long-term goal to invest money to get high returns.
2. What is your Risk Profile?
Each individual has his capacity for bearing risk. Generally, the higher the risk you take, the higher the returns you make and vice versa. It is recommended to ascertain your risk profile before deciding where to invest money to get good returns.
3. What is your Time Horizon?
The tenure of your investment is the time for which you need to hold the asset for maximum returns. The longer the duration of your investment, the higher is the potential returns and vice versa. Hence, knowing your time horizon is critical while deciding where to invest money to get good returns.
More Investment options for Good Returns in India?
1. Direct Equity or Stocks
Stocks market investments or direct equities are the best investment option for investors with a long time horizon and high-risk profile. The key factor while building a stock portfolio is to select schemes with strong fundamentals.
Since equities are risky, it is recommended to diversify across various companies and market capitalization.
Direct equity or Stocks are high-risk and high-return investment options where to invest money to get good returns.
Key Takeaways
- Equities are a highly liquid investment option to answer that where to invest money?
- Preferable for a long-term time horizon and high-risk profile to know that where to invest money?
2. Public Provident Fund (PPF)
Public Provident Fund is a low-risk tax saving scheme where to invest money to get good returns. The tenure of PPF is 15 years but the scheme is guaranteed by the government and is a perfect option for long-term investors with a low-risk profile to know where to invest money to get good returns to India.
Key Takeaways
- PPF has a long tenure of 15 years, hence it is a less liquid investment option for where to invest money.
- The minimum deposit ranges from Rs. 500- Rs. 1,50,000 in a financial year with tax-free returns.
3. Fixed Deposit
A fixed deposit is a financial instrument issued by banks or NBFCs, providing higher interest rates than a savings bank account. If you have a lump sum amount to invest for a fixed period and fixed income then a fixed deposit is the best investment option. FDs are the most preferred investment option where to invest to get good returns.
Key Takeaways
- The tenure of FD ranges from 7 days to 10 years.
- It is considered as one of the safest investment options of where to invest money with moderate returns.
4. Money Market Fund
A money market fund is a type of debt mutual fund which invests in highly liquid instruments for less than a year. They generally offer higher returns than fixed deposits but face credit risks. It is one of the best options for where to invest money to get good returns.
Key Takeaways
- Money market funds are short-term debt products for invest money to get high returns.
- They face credit risks and need to be held for 3 years to qualify for indexation as per income tax.
5. National Pension Scheme
The national pension scheme is a pension scheme regulated by the Pension Fund Regulatory and Development Authority of India (PFRDA). If you are an Indian resident between the age group of 18 years to 60 years, you can open an NPS account. It is one of the best options for where to invest money.
Key Takeaways
- NPS is eligible for tax exemption up to Rs. 1,50,000 under Section 80C of the Income Tax Act and a good option for where to invest money to get good returns.
- It is the best long-term investment plan for those who are seeking that where to invest money and want to plan for their retirement.
6. Real Estate
Real estate is also a good area to invest in. The returns on investment offered by real estate are higher than any other sector. If you have the funds to make large investments in real estate, a little patience is all you need as the value of the land or property will increase to a significant extent over a while.
Investment in real estate is highly profitable in the long run (based on the location of the property you purchase) In real estate investments, the location of the property and development in the area determines its growth and appreciation in the long run. You can earn returns from investment from these two ways as a good option of where to invest money.
- Capital appreciation of the house you purchased.
- The rent is earned from the tenants.
Nowadays, many banks and NBFCs provide home loan facilities, you can visit any bank or NBFCs website for a home loan calculator and EMI calculator.
7. Gold
Since olden times gold is used as a piece of jewelry, investment, and ‘any time money’.
For a risk-averse investor, the answer to where to invest money? Will mostly be gold.
This is because of these 2 reasons,
- Gold acts as a hedge against inflation
- Gold is an ages-old investment option.
As the making charges of gold are high, investors prefer to buy gold EFTs i.e. paper gold from the stock exchange. ETFs are tradable instruments in the stock markets with gold as the underlying asset. Therefore, it is the best option for where to invest money.
8. Initial Public Offerings
IPOs are undertakings by companies that wish to sell their shares to the general public. When an Initial Public Offering happens, the prices are usually low. In case the performance of the company has been up to par, the investor will have a better chance to make profits. IPOs are among the most preferred option for where to invest money in India as it offers returns above 60% per year.
9. Systematic Investment Plans
SIPs are easy and smart options that require individuals to invest a particular pre-determined sum of money regularly. The mode of payment (quarterly/monthly/weekly) can be chosen by the investor based on his / her convenience and preference. The amount chosen will be debited automatically from the investor’s linked account and put into a certain mutual fund scheme.
With each debit of the account, extra units of the scheme will be purchased and added to the investor’s mutual fund account. SIPs are considered as the ideal savings instruments as they not only deliver healthy returns but also play their part in helping investors inculcate the habit of savings. Therefore, it is one of the most preferred and best options for where to invest money.
Where to Invest Money to Get Good Returns – FAQs
Q1. What are the best investment plans to get good returns?
Ans. You can invest your money in the following investment plans that are listed below.
- High-yielding saving accounts.
- Money market funds
- Government Funds
- Corporate bonds
- Mutual Funds
- Index Funds, etc
Q2. What are the best investment options in India to invest money?
Ans. The best investment options that are available in India where to invest money are listed below.
- Public Provident Fund (PPF)
- Mutual Funds
- Bank Fixed Deposits (FDs)
- National Pension Scheme (NPS)
- Real Estate Investment
- Senior Citizen Savings Scheme, and many more.
Q3. Where to invest money if I have Rs. 50,000?
Ans. There are some ideas given below to let you know that where to invest money if you have the sum of Rs. 5000.
- Buy Bonds
- Make an FD
- Invest with betterment
- Max out an IRA
- Invest in a taxable account
- Increase your emergency funds, etc.
