Investments are the cornerstone of financial success. Diverse and rich investment portfolio always leads to greater gains. While short-term investments can help you manage your immediate financial goals, long-term investment plans ensure complete financial security throughout life.
If you are looking to venture into long-term investments, here are the best investment options in India.
- Fixed deposit
Depending on the financer of your choice, fixed deposits can have a tenor of up to 10 years. FDs are the safest investment option available to you, where returns are considerably more than the interest accrued through a savings account.
Fixed deposits are ideal for individuals looking for schemes to invest in to plan their post-retirement life. Depending on the tenor of investment and the financing company you choose, the rate of interest you earn through FDs with interest gains above 7.5%. Refer to financers such as Bajaj Finance for the highest interest rates on Fixed Deposits as well as multiple additional benefits as well.
- Public Provident Fund
Public provident funds or PPFs are the safest long-term investment plan. With a lock-in period of 15 years, you can sit back and see your wealth increased over the years at a rate of 7.5% to 8.0% annually. Furthermore, you can claim tax deductions under Section 80C of the Income Tax Act. Tax exemption is available to people whose PPF interest amounts up to Rs. 1.5 Lakh.
If you are worried about the lack of liquidity, you can opt for a partial withdrawal of PPF amount after the 5th year of investment albeit subject to certain pre-set conditions.
- Mutual funds
Mutual funds are considered as risky investments although they are popularly availed as well. While risk comes attached, the type of mutual fund you decide to invest in can determine the amount of risk you face. If you opt for long-term debt mutual funds, risks are significantly low. In the case of equity mutual funds, risks are high, but so are the returns.
The most important pointer to remember when opting for a mutual fund is that a professional fund manager will handle the day-to-day maintenance and put your money into the best investment options in India. So, proper portfolio and market research are vital to the future of your invested funds.
- Gold investments
Gold investment is a popular practice in India. While some purchases gold jewelry and sell them when the price of gold increases, others invest in paper gold instead. Gold ETFs, gold mutual funds, Gold Deposit Schemes are alternate methods to invest in gold. Due to the constant surge of gold prices, these investments are profitable and carry limited risks.
- Long-term bonds
Bonds are instruments through which the Indian government and other companies borrow money. If you invest in these bonds, the government returns your money with a substantial amount of interest. Bonds are redeemable after a certain period.
Long-term investment plans through bonds include infrastructure and NABARD bonds. Not only do these instruments prove valuable in the long-run but they also offer tax exemptions on the returns under Section 80C of the Income Tax Act.
- National Pension Scheme
The best retirement planning step you can take is to start investing in the National Pension Scheme from an early age. While NPS investment is mandatory for all state and Central Government employees, others can include themselves in the plan voluntarily. You can join as early as 18 years and start to build a healthy post-retirement corpus.
However, the lack of liquidity and the taxable interest are some of the disadvantages of NPS that you must consider before you start investing. Certain restrictions in place prevent you from withdrawing the sum before you retire.
- Real estate
Individuals with the necessary financial backing can venture into real estate investments as part of their long-term investment plan. Buy a property with an aim to liquidate it upon value appreciation. When it does increase, sell it for a substantial profit margin and therefore, return of investments. However, to do this effectively, you need to have a good idea about the area and properties whose price may increase in the future.
Blind purchasing of a property may lead to depreciation of value and an eventual loss for you.
Long-term investments lack instant gratification, which is why you must be patient and look at the bigger picture. You may fail to notice any improvement in your finances immediately, but over the years, such investments will make you and your family more financially secure.