Last Updated on Dec 5, 2024 by Aishika Banerjee
With the uncertainty the world has faced in the past few years, you may wonder, ‘What is the best place to invest money in India?’ Well, investors are increasingly turning towards long-term investment options. These options can help you build wealth, hedge yourself against inflation, and take advantage of potential tax benefits. Here are the ten popular and best investment ideas on where you can invest money in India:
- Stocks
- Mutual funds
- ETFs
- Fixed deposits
- Gold
- Real estate
- Bonds
- Saving schemes
- SIP mutual funds
- ULIPs
- REITs
- National Savings Scheme (NSC)
- Post Office Time Deposit
- Kisan Vikas Patra (KVP)
- Cryptocurrencies
In this article, let’s understand each investment option and learn how to find the best investment option for your portfolio.
Table of Contents
What is Investment?
To put it simply, investment is the process of putting your money into assets like stocks, bonds, real estate, or mutual funds with the aim of earning returns or growing your wealth over time. It involves committing capital today in hopes of generating income or profit in the future, often influenced by factors like risk, time horizon, and market conditions.
How an Investment Works?
Investing is an essential step towards building your financial future and achieving your long-term goals. However, understanding how investments work can often feel overwhelming. Whether you are exploring safe investments with high returns in India or wondering about the best way to invest money, knowing the basics of how investments operate can help you make better decisions. Let’s walk through how investments work step by step.
1. The Concept of Return on Investment (ROI)
When you invest, the ultimate goal is usually to earn the best return on investment money. Return on Investment, or ROI, is a simple way to understand how profitable your investment might be. It measures how much money you could make—or lose—compared to the amount you initially invested.
For example, if you put your money into shares for long-term investment or pick high return investment in India, you would typically expect the value of those shares to grow over time, leading to a positive ROI. This concept is crucial as it helps you assess whether an investment is worth your time and money.
2. The Investment Process
Investing is more than just picking the right stock or fund; it’s a process that involves several key steps:
- Research and Selection: The first step is research. You’ll need to gather information about potential investments, such as the 10 best shares to buy today for the long term or the best investment options in India. This research helps you identify investments that match your financial goals, whether you’re aiming for growth, income, or stability.
- Making the Investment Decision: Once you have done your research, you will make your investment decision. You might decide to go with top 10 ETF funds in India if you’re seeking diversification or choose the best stocks to buy today in India for short-term gains if you’re looking for quicker returns.
- Executing the Investment: After making a decision, you execute the investment by purchasing the chosen asset, such as stocks, mutual funds, or bonds. If you opt for a one-time investment plan, you will make a lump sum payment into the selected option.
- Monitoring and Adjusting: Investing doesn’t end with buying; it’s important to keep an eye on your investments to ensure they are performing as expected. This ongoing process may involve rebalancing your portfolio, especially if market conditions change or your financial goals evolve. Whether you’re targeting good returns or aiming for safer bets, monitoring helps keep your investments aligned with your objectives.
3. Understanding Risk and Return
The idea of risk and return is at the heart of every investment decision. In general, the higher the potential return, the higher the risk involved. For example, high return stocks may offer great upside potential but can also be highly volatile. On the flip side, safe investments with high returns in India might offer more predictable earnings but at a lower growth rate.
Balancing risk and return is crucial to ensure that your investment strategy matches your comfort level and financial goals. For example, if you prefer stability, you might lean towards good investment plans in India that offers consistent returns. If you’re willing to take on more risk for the possibility of the best returns on investments, then exploring the best stocks to invest in could be a more suitable path.
4. Time Horizon Matters
Your investment’s time horizon, or the length of time you plan to hold an investment before taking the money out, plays a vital role in your overall strategy. Short-term investments, such as the best stocks to buy today in India for the short term, are typically focused on quick gains and are often more volatile.
In contrast, long-term investments like shares to buy for the long term or the best share for long term growth are designed to benefit from compounding and withstand market fluctuations over time. Knowing your time horizon can help you choose the right mix of investments, balancing risk and return in a way that suits your financial journey in saving and investing.
Types of investments in India
There are different types of investments based on multiple factors. Let’s have a look at the different kinds of investments.
Based on Risk
- Low-risk investments in India
A focus on capital preservation and stability characterises low-risk investments. Typically, this category is favoured by individuals with a lower risk tolerance, such as retirees or those approaching retirement. Low-risk investment options in India, often considered the best things to invest in by investors with low risk tolerance, include Fixed Deposits (FDs), Savings Accounts, and Government Bonds. Low-risk investors prioritise the security of their principal amount and consistent, guaranteed returns.
- Medium-risk investments in India
Medium-risk investments strike a balance between potential returns and moderate volatility. This category often appeals to those with a longer investment horizon. Best places to invest money with medium-risk options may include Mutual Funds, National Pension System (NPS), and Real Estate. Medium-risk investors seek a blend of stability and growth in their portfolios.
- High-risk investments in India
The potential for substantial returns characterises high-risk investments, but they come with higher volatility. This category attracts individuals with a higher risk appetite and a long-term investment horizon. Examples of high-risk options include individual stocks, equity mutual funds focused on aggressive growth and cryptocurrency investments. These choices can experience substantial price fluctuations, and returns are not guaranteed. High-risk investors often actively manage their portfolios and closely monitor market trends to capitalise on potential opportunities.
Based on the Need and Purpose of the Investments
- Growth investment plans
Growth Investment Plans are designed to provide capital appreciation over the long term. These plans aim to deliver substantial returns by investing in assets with growth potential. Examples include stocks of companies with high growth prospects or sectors expected to outperform, equity mutual funds, innovation funds, individual growth stocks, etc. Growth Investment Plans typically carry a higher risk due to their exposure to market fluctuations. They are suitable for investors with a longer time horizon and a higher risk tolerance.
- Safe investment plans
Safe Investment options prioritise capital preservation and stability. These plans aim to protect the invested amount while providing modest returns. Safety is emphasised over an investment with high returns, making them suitable for conservative investors. Examples include fixed deposits, government bonds, savings accounts, and more. Safe Investment Plans, including the best savings plans, have a low-risk level, making them suitable for investors prioritising capital preservation and seeking a predictable, stable source of saving and investments.
- Income investment plans
Income Investment Plans focus on generating a steady stream of income. These best money investment plans suit investors looking for regular cash flow and are less concerned about capital appreciation. Examples include corporate bonds, dividend stocks, REITs, and more. Income Investment Plans carry a moderate risk level. While they focus on generating income, there may be some exposure to market fluctuations, credit risk, or changes in interest rates. They are suitable for investors seeking a balance between income generation and capital preservation.
Where to Invest Money in India?
Here are 15 best places to invest money in India for good returns:
1. Stocks
Stocks are one of India’s most popular investment options. It is preferred by investors looking for long-term options with good returns. However, it is important to note that investing in stocks involves risk, and you need to invest only if you understand the market well. As an investor, you need to do proper research before investing in stocks.
There are different types of stocks, like growth stocks, value stocks, etc. All these stocks can be filtered according to key parameters like market cap, net profit, etc. You must understand which sector the stock belongs to, management, market scenario, etc.
You can use Tickertape’s Stock Screener to find the best stocks in India. With Tickertape’s 200+ filters, you can quickly and easily narrow down your search to find stocks that meet your specific criteria. You can also create custom filters to find stocks that meet your exact needs. In addition to this, you can also create a custom stock universe to focus your search on a specific group of stocks. This is a great way to save time and focus on the stocks that are most relevant to you. Start your search for the best investment opportunities today; explore the screener now!
To understand deeply how to invest in share market, read this article.
2. Mutual funds
Mutual funds are a common pool of money invested in multiple assets like equities, bonds, etc. A fund manager manages it. It allows you to diversify your investment portfolio, which can help you mitigate risk.
There are different types of mutual funds: debt, growth, hybrid and more. The fund manager considers your investment objective and risk appetite and invests in a fund that suits you. They are preferred for both long-term and short-term investment horizons.
Yet again, similar to stocks, there are various mutual funds in the market. But Tickertape comes to your rescue. You can use Tickertape’s Mutual Fund Screener to filter the best mutual fund according to key parameters like assets under management (AUM), net asset value (NAV), annual returns and more. There are over 50 filters, custom filters, a custom mutual fund universe, pre-built screens, custom screens, individual fund analysis, a mutual fund watchlist, and more. Learn How To Use Tickertape Mutual Fund Screener To Pick the Best Fund.
One of the many benefits of investing in mutual funds is that you can avail a loan against mutual funds. To understand how to find the best mutual funds and ways to invest in mutual funds, read this article.
3. ETFs
Exchange-Traded Funds (ETFs) are versatile investment options that blend the characteristics of stocks and mutual funds. They allow you to invest in a diversified portfolio of assets, such as stocks, bonds, or commodities, while trading on the stock market like a regular share. ETFs are considered among the best investment options in India for both long-term and short-term investors due to their low cost, transparency, and potential for good returns. You can explore various types of ETFs, including equity, debt, gold, and sector-specific funds, based on your investment goals and risk appetite.
With a wide range of ETFs available, it can be challenging to identify the best ETFs for your needs. Tickertape Stock Screener can help you filter and find the top 10 ETF funds in India by using key parameters such as expense ratio, assets under management (AUM), returns, and tracking error. The screener provides over 50 filters, including custom screens, individual ETF analysis, and a watchlist feature, allowing you to refine your search based on your preferred investment strategy. Whether you are looking for safe investments with high returns in India or high return stocks within an ETF format, Tickertape can guide your decision-making process. Check out guides on the Top 10 ETF Funds in India, Exchange-Traded Funds, Best Gold ETFs in India, and ETFs vs. Mutual Funds to learn more.
Investing in ETFs is an excellent way to diversify your portfolio with the potential for high returns while keeping costs low. These funds are a popular choice for investors looking for the best way to invest money, offering flexibility, liquidity, and access to various sectors of the market. With Tickertape’s tools, you can easily find the best ETFs to align with your financial goals, be it for a one-time investment plan or regular investing.
4. Fixed deposits
This is one of India’s traditional and popular investment options. Fixed deposits (FD) are one of the first results that come to your mind when someone asks where to invest money in India. The reason behind its popularity is the minimal risk profile with decent returns.
Fixed deposits are offered by banks, post offices and Non-Banking Financial Companies (NBFCs). They are suited for your lump-sum investment to grow and also offer interest at regular intervals. The interest rate on FDs varies with the bank or the NBFC. You can leverage your investment in fixed deposits by availing a loan against them. Read more about it here.
4. Gold
This is one of India’s oldest and most popular investment options. Gold is considered an auspicious metal in India and is known for its value appraisal benefit. It acts as a hedge against inflation and is considered a low-risk investment.
The traditional way to invest in gold is through ornaments, coins or bars. Recently, several gold investment options like gold deposits, gold ETFs, and gold mutual funds have come up. If you are wondering if digital gold is a good investment, then find out your answers here.
With many gold investment options available in India, it is difficult to understand each investment and how to invest in them. Well, don’t fret; we have created a guide for you to understand how to invest in gold. Read it here.
You can start your journey of investing in Digital Gold on Tickertape in a few easy steps: enter the amount you want to invest in, start a habit of investing or investing one-time, and voila, you’re done. It’s that easy; you can keep a check on your gold investment by tracking them on your portfolio on Tickertape.
You may also like to read 5 Reasons to Invest in Digital Gold.
5. Real estate
Investing in real estate is also one of the popular money investment ideas in India. Though it involves a good amount of investment, its returns are huge. You can get returns either when you sell it or monthly in the form of rent. But while buying or selling, ensure to consider all the related charges like registration fees, property taxes, and more. It can be considered a good investment option for the long-term horizon.
6. Bonds
Similar to individuals, companies or governments need money investments to grow and develop. To raise funds for their company, they offer bonds. You can buy those bonds for a fixed interest and tenure. It is considered a low-risk investment option in India, especially when they are government-backed. Learn more about bonds here.
7. Saving schemes
As the name suggests, saving schemes help you save your monthly income for a period of time, which turns into a big corpus. These are backed by the government, banks or financial institutions. The savings scheme has a lock-in period and encourages you to save regularly. They are considered low-risk, long-term investment options that don’t require a lump-sum investment.
Employee Provident Fund (EPF), National Pension Scheme (NPS), National Savings Certificate (NSC), Post Office Savings Account, Senior Citizen Savings Scheme (SCSS), etc. are a few popular savings schemes in India.
8. SIP mutual funds
Well, you know about mutual funds, but did you know that all mutual funds don’t require a lump-sum investment amount? Yes. Systematic Investment Plan (SIP) is a type of mutual fund which doesn’t require lump-sum investment. The investment in SIP starts at Rs. 100 and allows investment at regular intervals. So, if you are interested in investing in mutual funds but are worried about lump-sum investment, SIP can be your go-to option.
Through SIP, you can invest monthly in a disciplined manner and avail yourself of the benefit of compound interest. You can visit Tickertape to find the list of SIP mutual funds in India. Go to Mutual Fund Screener and search for ‘SIP Investment’ in ‘Add Filters’. Find the list of SIP mutual funds in India and sort them according to your preferred parameters like AUM, NAV, 1-yr returns, etc.
9. ULIPs
Unit Linked Insurance Plans (ULIPs) are provided by insurance companies. Here, a portion of the investment is invested in stocks or bonds, while the remaining is invested in life insurance. Overall, it invests in equity and debt markets while simultaneously offering protection to the investor. It covers returns, protection and tax-saving as well. However, as it involves equity, there is a certain risk involved. Learn about them here, along with everything you need to know about ULIPs and the five best ULIP plans to secure your future.
10. REITs
Real Estate Investment Trust (REIT) is an investment option similar to mutual funds where investors pool in investment and REIT companies manage the investment. They invest the funds in primary real estate buildings and mortgages. They generate money from the rental income, and the investors will get a portion of the returns in the form of dividends. Learn more about this investment here.
12. National Savings Scheme (NSC)
The National Savings Certificate (NSC) is a government-backed investment plan originally designed to encourage small savings among individuals. NSC is considered one of the best investment options in India, especially for risk-averse investors seeking safe investments with high returns. The scheme offers fixed returns at competitive interest rates, making it a reliable choice for those looking to invest in secure and stable avenues.
NSC can be purchased at any post office, making it easily accessible to a broad audience. It also provides tax benefits under Section 80C of the Income Tax Act, allowing investors to save taxes while earning good returns. This makes NSC one of the best investment plans in India for those who prefer guaranteed returns over market-linked volatility.
13. Post Office Time Deposit
Post Office Time Deposit (POTD) is a safe and government-backed investment option that offers fixed returns, similar to a bank fixed deposit but often with better interest rates. The scheme is ideal for investors looking for a secure investment plan that provides predictable returns. POTD accounts can be opened at any post office across India, with flexible tenures ranging from 1 to 5 years, catering to both short-term and long-term investment needs.
The 5-year POTD also qualifies for tax benefits under Section 80C, making it one of the best investment options for those seeking safe investments with guaranteed returns. This investment plan suits those looking for one-time investments with fixed returns and a low-risk profile, making it an appealing choice for conservative investors.
14. Kisan Vikas Patra (KVP)
Originally designed for farmers to promote savings in rural areas, Kisan Vikas Patra (KVP) has evolved into one of the best investment options in India for anyone seeking secure and guaranteed returns. KVP is a small savings scheme available at post offices, where your investment doubles in a predetermined period, usually around 10 years.
It is a low-risk, government-backed plan that provides a guaranteed return on investment, making it highly suitable for conservative investors who prioritise safety over high returns. KVP requires no minimum holding period, and its simple, straightforward structure makes it one of the best investments for individuals seeking a reliable and long-term one-time investment plan.
15. Cryptocurrencies
Cryptocurrencies are digital assets that have gained popularity among investors seeking high returns, albeit with substantial risks. Unlike traditional investment options like NSC or KVP, cryptocurrencies are not backed by any government and operate on decentralised networks such as blockchain. These investments offer the potential for significant returns, making them attractive to investors who are willing to accept high volatility.
Cryptocurrencies like Bitcoin, Ethereum, and others have become popular investment options, especially for those looking for innovative ways to invest money and diversify their portfolios. However, cryptocurrencies are not considered safe investments with guaranteed returns, and investors must be cautious and conduct thorough research. If you are looking at how to invest money in dynamic assets, cryptocurrencies offer an alternative, but it’s essential to be aware of the associated risks and market fluctuations.
How to Invest in India?
Apart from the ones discussed above, there are various other investment options in India as well. The risk profile of each investment is different, and no investment suits all your investment needs. Hence, you need to understand each investment option carefully and pick the ones that suit your objective. You need to create a diversified investment portfolio to mitigate risk. Your portfolio should be well-balanced; even if one investment is not doing well, the profit on the other ones should be able to compensate. To check if your portfolio is well-diversified, connect it with Tickertape.
Tickertape’s Diversification Score is a powerful tool that provides insights into their portfolios and helps them make informed and profitable investment decisions. The Diversification Score ranges from 1 to 100, and the higher the score, the closer the portfolio is to being perfectly diversified and less volatile. If the score is too low, you can further diversify your portfolio by adding stocks from other sectors or market caps. Proper diversification can help you achieve better risk-adjusted returns and protect against market volatility. It sure helps to mitigate red flags, too! So, what are you waiting for? Connect your portfolio now!
Factors for Choosing the Right Investment Plan
When picking the right investment plan in India for best returns, it’s important to think about a few key things. Here are some of the main factors to keep in mind when considering the best savings options in India:
- Financial goals: Figure out what you want to do with your money. It can be buying things, saving for your kids’ education or weddings, getting a home, or planning for when you stop working. The best investment in India should match up with these goals.
- Risk tolerance: Decide how comfortable you are with taking risks. If you’re okay with more risk, select investments from the list of high-risk. If you want less risk, you might go for plans backed by the government or those offering higher security. Talking to an expert while charting out investments based on risks is always worthwhile.
- Performance: It may be one of the key factors when choosing the investment for your portfolio. Checking how well an investment has done in the past can give you an insight into their earnings and how they work. It will help you set the right expectations and pick the highest return investment for your portfolio, among many other options. For example, if you’re thinking about mutual funds, see how much money they’ve made before and compare that to other choices.
- Lock-in period: Some investments lock your money in for a specific time. For instance, ELSS funds make you wait for 3-yrs before you can take out your money. Choose an investment with a wait time that fits your goals and needs.
- Expense related to investment: It is always worthwhile to know about the costs connected to your investment. For example, mutual funds come with an expense ratio and an exit load. Understanding these costs before investing money will give you a clear picture of how much money you may end up with and how much you have to pay for each investment.
- Market conditions and trends: Keep an eye on what’s happening in the market. For example, when things are uncertain, gold prices usually go up because people see it as a safe place for their money. By thinking about these things based on what you need, you can choose the best investment plan for you.
Conclusion
Finding the right investment option that suits you may not be an easy task, but once you understand the working, you’ll be able to make wise decisions and help your wealth grow. If you are new to the investment world, try learning the concepts. Make use of the Blog by Tickertape that explains investment concepts in simple terms and provides expert opinions. And there are financial advisors to help you with investment choices.
Frequently Asked Questions (FAQs) on Where to Invest Money in India
1. Which investment gives highest returns?
There are investment options like stocks and mutual funds that offer high returns, but they are also considered highly risky. Therefore, consider your investment objective and risk appetite to determine what the best saving options are for you.
2. Which is the best investment plan in India for monthly income?
Investments like real estate, provident funds, fixed deposits, etc., offer monthly income. The monthly income depends on the scheme you pick.
3. What are the investment options available with low risk?
Fixed deposits and provident funds are considered low-risk investments compared to other investment options.
4. What are the best stocks to invest in?
There are 7000+ companies listed on the Indian stock exchanges. The best ones can be picked based on different parameters like market cap, net profit, 5 yr CAGR, annual returns, and more. Use Tickertape Stock Screener to filter the best stocks in India. There are 200+ filters that can help you understand the performance of a stock better.
5. Where should i invest my money?
The top 10 investment options in India are Stocks, Mutual funds, Fixed deposits, Gold, Real estate, Bonds, Saving schemes, SIP mutual funds, ULIPs, and REITs.
6. How to invest money with a low budget in India?
You can start by exploring low-cost investment options like SIPs (Systematic Investment Plans) in mutual funds, government savings schemes, etc. These allow you to invest with a small budget, ensuring diversification and potential growth over time.
Explore other popular stock collections on Tickertape –
Here’s are some of the popular stock collections across different sectors in India:
As an insatiable reader and learner, I’ve spent the last two years exploring the world of finance. With my creative mind and curious spirit, I love making complex finance topics easy and fun for everyone to understand. Join me on my journey as we navigate the world of finance together!
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