Figuring out where to invest money for sustained wealth creation is an area of concern for individuals of all income groups. Hence, it is crucial to learn about some of the proven ways to grow your savings over the upcoming years. Many short-term and long-term investment options are there in the market and you can depend on one or more of these instruments based on your goals and risk appetite.
In this guide, we will learn in detail about some of the best ways to invest money in 2024.
10 Best Investment Options in India
Below is a table listing high-return investment options available in India, offering significant growth potential:
| Investment Option | Ideal Investment Tenure | Tax Benefit |
|---|---|---|
| Fixed Deposit | 6 months to 60 months (based on individual goals) | Fixed deposit account holders can enjoy tax benefits under Section 80C upon opening a 5-year tax saver FD. |
| Mutual Funds | Less than 12 months to over 60 months (based on equity/debt/hybrid funds) | Mutual fund participants can enjoy Section 80C benefits only when they have purchased units in ELSS funds. |
| Direct Equity | 3 years and more | No additional tax benefits are extended to stock owners. |
| Post Office Savings Scheme | 6 months to 60 months | No additional tax benefits are provided to post office savings account holders as per the latest regulations. |
| Bonds | 12 months to over 60 months | No tax benefits are rewarded. |
| National Pension Scheme (NPS) | Until superannuation when you reach the age of retirement (60 years) | Tax deduction is applicable as per Section 80C and 80CCD (1b) on the self-contribution part. |
| Unit Linked Insurance Plans (ULIPs) | Over 60 months | Participants get Section 80C tax benefits on the invested sum and Section 10 (10D) perks apply on the maturity sum. |
| Liquid Funds | Less than 12 months | No tax benefits are given based on the latest regulations. |
| Public Provident Fund (PPF) | 15 years and more (extension of 5 year-blocks is allowed at a time after the initial 15 years) | Individuals get tax deduction benefits as per Section 80C. |
| Senior Citizen Savings Scheme (SCSS) | 5 years to 8 years (an option for extension of 3 years is given after the first 5 years) | Individuals get tax deduction benefits as per Section 80C. |
Now that you have seen what are the best investment options to get high returns, you must gather additional knowledge about each of these investment avenues to make a well-informed financial decision.
1. Fixed Deposits (FDs)
If you are wondering where to invest money for short-term goals, fixed deposits are the safest and most lucrative options. Many banks currently provide highly competitive interest rates for various FD schemes. Additionally, you get hassle-free renewal methods that enable you to enjoy the compounding effect.
To date, fixed deposits are still a hit with savvy investors as they restrict your principal from depreciating and provide guaranteed returns.
Fixed Deposits (FDs): “Secure your wealth with guaranteed returns.”
2. Mutual Funds
Unlike fixed deposit accounts, mutual fund investments are largely dependent on secondary market factors. Hence, it is important to optimise the risk exposure while investing in mutual funds.
Whether your goal is short-term or long-term, you can create a well-balanced mutual fund portfolio depending on your research. It is a highly favoured investment choice in India, especially for those who prioritise substantial returns over the long term.
Mutual Funds: “Invest smartly for growth—your portfolio, your way.”
3. Direct Equity
With a long-term wealth creation plan in mind, you can consider investing in shares of listed companies. It directly ties you to the ownership of those companies. Thus, by owning shares, you not only secure profits but also secure the right to vote in company decisions.
From the investment perspective, earning from stocks can be super rewarding but definitely riskier than mutual funds.
Direct Equity: “Own a piece of success; invest in the companies you believe in.”
4. Post Office Savings Plans
The various savings avenues offered by India Post have empowered Indians to cultivate a regular savings habit while simultaneously investing to counter the rising tide of inflation. Therefore, you can rely on similar schemes, such as a post office savings account, a 5-year recurring deposit, or a time deposit account, and maintain such accounts by visiting your nearest post office branch.
Post Office Savings Plans: “Trusted savings for a steady future.”
5. Bonds
Like individuals, companies too need to secure funds to support infrastructural developments. For that, they issue bonds that can be acquired by interested investors to help the companies raise much-needed investment. In return, you, as an investor, keep on earning a fixed interest payment throughout the tenure of lending. You can learn more about the earnings while reviewing the bond details before participating in a particular bond.
Bonds: “Stable returns while supporting infrastructural growth.”
6. National Pension Schemes
The NPS is a government-regulated pension plan for Indian citizens that promises to offer guaranteed monthly income after retirement. You can put NPS on top of the list of safe investments with high returns, particularly for Indians seeking long-term capital appreciation. Through the NPS, your hard-earned money is systematically invested in government bonds, direct equities and additional investment avenues according to your preferences.
National Pension Scheme (NPS): “A secured retirement plan with consistent growth.”
7. ULIPs
Another top investment option for people who are comfortable with market-linked returns is Unit Linked Insurance Plans. Under this, you can purchase a life insurance policy that allows you to simultaneously invest in various funds and avail tax advantages as per Section 80C of the Income Tax Act 1961.
Unit Linked Insurance Plans (ULIPs): “Combine insurance with growth-focused investment.”
8. Liquid Funds
Liquid funds are very similar to stock investments, with most of the money going into government bonds and securities. These investment plans have no lock-in periods and thus are suitable for short-term investors.
Liquid Funds: “Fast access to funds with reliable short-term returns.”
9. PPFs
A Public Provident Fund is the best government-backed long-term investment instrument. It even allows the participants to partially withdraw their contributions after completing six years of initial investments.
Public Provident Fund (PPF): “Government-backed security with long-term growth potential.”
10. Senior Citizen Savings Scheme (SCSS)
The biggest advantage for seniors in India opting for this scheme is the interest rate they get on their savings. As of April 5, 2024, SCSS offers an interest rate of 8.20% per annum or better.
Senior Citizen Savings Scheme (SCSS): “Enjoy high interest with peace of mind in your golden years.”
Final Word
In the end, to finalise where to invest money, you can rely on professional financial advisors. It can be a vital step in your investment journey as growing wealth needs strategic planning and execution which can be made much easier when you have the right guidance.
