“I am an FD person, I like to keep my money in the bank and let it grow slowly and steadily! I wish that was enough to get by in today’s world.” Everyone must think the same at times.
Unfortunately, slow and steady doesn’t win this race of economic depression and inflation. You might think this is the safest way but think again, maybe the banks are profiting more from your money than you could.
But, on the other hand, it’s scary to invest in the share market and there aren’t many options left for investment. Look no further, put down the burden of doing research, and just read here for the best investment options in India.
This article focuses on investment options like renewable energy assets, debt funds investments, RBI’s infamous floating bonds, NSCs, Mutual funds, and a few more adoptable options which are some of the best investment options.
What is the Best Investment Options in India? 7 Best Investment Options in India With Low Risk
With so many investment options available in the market, it may be difficult to select the best investment options that can cater to your needs. Here are some of the best investment options in India.
1. Renewable Energy Assets
This decade is going to see an uproar in investment in the renewable energy sector of India. Renewable energy assets are seeing investments from giants like Reliance, TATA group, L&T, and others.
Renewable energy assets that are considered some of the best investment options in India to get more returns are solar projects, wind energy projects, and the hybridization model of solar and wind energy.
The investment options are multiple and vary depending on the duration of the projects. Unlike other kinds of investments, if you buy a share in any solar project you will earn returns on it even after the completion of the project.
It works like royalty, you get paid for the use of a percentage of assets being used by other users or consumers. Isn’t it great!
Here are a few reasons why big companies trust this sector more and why you shouldn’t hesitate to invest in them too.
- The Union Budget of 2023 has made it very clear that the Indian government is committed to increasing its production of green energy. To do so, the central government has approved a budget of 2.5 billion dollars for 13GW of renewable energy infrastructure in Ladakh.
- Apart from this, the government initiatives like Invest India are calling out investors to invest in renewable energy projects.
- The budget also has exempted investments in the clean energy sector from any taxes.
- Giving out solar tariffs and launching programs like Kusum Yojana, also are evidence that this sector is backed by the government.
Check out the Financial Benefits Of Investing In Renewable Energy here.
How to invest in renewable energy assets to earn?
SustVest is the answer to this question. The company specializes in managing renewable energy projects. It has partnerships with various companies in the green energy sector and helps them to create renewable energy.
The requirements of these projects include building rooftop solar panels – something that is steadily being employed by all big companies.
To become an investor with SustVest all you have to do is:
- Go to the website and browse through the projects.
- Select any project which fits your investment amount and duration of the investment.
- Now, register and finish the E-KYC process.
- Head to the wallet section and add money.
- Go to the project you selected before and choose the amount of money you’d like to invest.
- Make the investment. You will receive the documents concerning your investment online. Add your digital signature and send it.
There you go, you have become a SustVest investor and created a secondary source of income from the comfort of your home.
To know more about SustVest’s approach towards renewable energy asset investments head to this link. It will not take more than 2 mins!
2. Debt Funds
Debt funds are considered to be one of the best investment options in India, better than equity funds, due to their low-risk nature.
Let’s see how they work.
So, debt funds are basically loans given to companies to carry out their business projects. Who lends them money? Well, it’s people like you. The public and private companies sanction bills and bonds to be bought by the investors. The investors get an interest on the bonds and bills purchased.
The investor receives earnings every month in the form of installments. Now, the bonds can have both fixed and floating installments. There are a total of 18 types of bonds in the market. Therefore, choose wisely!
The fixed income debt funds have a fixed monthly installment, these are also called fixed-income security funds. You know the interest and percentage you will gain on maturity.
It’s true that debt funds offer more returns than FDs and Post Office schemes, but they are subjected to market conditions. A few examples of types of debt funds are corporate funds, government bonds, treasury bills, and money market instruments.
3. Post Office National Savings Monthly Income Account
The MIS scheme given by the Post Office is one of the secure ways to invest your money and earn monthly returns. Though the returns are not as high as in renewable energy assets or debt funds, it’s still worth investing in.
- The interest rate effective from 1 April 2023 is 7.4% per annum payable monthly.
- The minimum amount to be invested is INR 1000 and the maximum amount can be INR 9 lakhs per account and INR 15 lakhs for a joint account.
- The single account can be opened by any individual, and the joint account can be opened for 3 adults.
- In case of a minor less than 10 years of age or a mentally unwell individual, the account will be under a guardian.
- Minors above 10 years of age can open an account in their name.
- Interest will be paid after the completion of a month and then so on every month till maturity.
- If any additional amount is added to the account, no interest will be given on that.
- Interest can be collected from the savings account of the same post office or ECS.
- NOTE: The interest earned under this scheme is taxable.
- Premature closure: no account can be closed before completing one year.
- Between 1 to 3 years, the principal amount will be deducted at 2% and then the remaining amount will be paid.
- Between 3 to 5 years, the principal amount will be deducted at 1% and then the remaining amount will be paid.
- At the time of Maturity i.e. 5 years from the date of opening the account, submit the form along with the passbook at the Post Office to close the account.
- In case of the demise of the account holder, the money will be given to their legal heir or the nominee.
4. RBI Floating Rate Savings Bonds
Reserve Bank of India has launched floating-rate bonds which offer a higher return as compared to a regular RBI bond. As you know the interest rate on the floating bonds is reset every sixth month, and going with the trend it is increasing.
Recently, the GOI announced the interest rate applicable from March to September 2023 on the Government of India floating rate bond 2033 will be 8.51%.
- The minimum amount that can be invested in floating-rate bonds is INR 1,000, while the maximum amount has no limit. The only condition is that the maximum amount should be in multiples of INR 1,000.
- Eligibility criteria: this bond can be bought by only an Indian citizen, individuals or HUF.
- The tenure of the Bond is 7 years.
- Premature withdrawal or redemption is only applicable to only senior citizens.
- The amount received after the maturity of the bond is taxable according to the applicable tax slab of the income tax act.
- One thing to remember is that these bonds are non-transferable. Also, it can’t be used as collateral to get loans from banks.
5. National Savings Certificates
NSCs are another form of investment that is considered to be one of the best investment options in India that gives more returns than a regular fixed deposit. The NSCs are safe to invest in and at present offer a compounded interest rate of 7.7% that is payable at maturity. People also opt for it as a tax-saving investment.
- The maturity period of the NSC is 5 years.
- The interest rate is 7.7% compounded annually and paid monthly.
- The minimum investment amount is INR 1000.
- The Maximum investment amount is any amount in multiple of INR 100.
- The account can be open single or joint or for a minor or for a mentally unwell person as well.
- The interest earned comes under the tax exemptions under section 80 C.
- The account can only be closed prematurely in case of death, by order of the court, or on pledging of the account by any authority.
6. Mutual Funds
It’s a common misconception to believe that investment in mutual funds is always risky.
Mutual funds are considered to be the best investment options in India due to their relatively low-risk and hassle-free nature. The risk factor depends upon the category of mutual fund you are investing in.
For example, the debt fund is also a type of mutual fund only where the investor puts their money on a lease. But, the returns on it are fixed, isn’t it?
Similarly, you can invest in other types of mutual funds as well after understanding the gain and loss factors associated with them. However, if you are looking for investment to earn a higher value of returns, mutual funds are best for it.
You can also invest in mutual funds to diversify your investment portfolio. Say you have invested in all of the schemes mentioned in this article, and you want to make some quick bucks. Then, invest in liquid funds. These are only for a period of 3 months or so.
Analyze the portfolio of the fund you are investing in to figure out expected returns. Now, if you can handle a higher-risk fund then invest in equity funds. But, these are only good if you leave them as it is for a long period of time.
Now, you can invest either in mid-cap, low-cap or large-cap companies’ mutual funds. The segregation is made on the basis of their market capitalization value in NIFTY. If you are not sure about where to make investments, you can reach out to any professional also known as a fund manager.
7. Public Provident Fund
The PPF is a well-known investment fund in the service class. It is considered to be amongst the best investment options in India, and deservedly so! The interest rate offered under this scheme is less than NSC, but the duration is more. So, if you are looking for a scheme for long-term investment and a low-risk category, this scheme surely fits your bill. On top of it, they are also a tax-saving investment option.
- The maturity period of any PPF account is 15 years.
- The account can be opened in any bank or post office. There can be only one account per individual.
- The interest rate offered as of 1 April 2023 is 7.1% compounded annually.
- The minimum amount required to open an account is INR 500 and the maximum amount that can be deposited must not be more than INR 1.5 lakhs in one financial year.
- The amounts can be deposited in installments or in a lump sum amount.
- The account will be discontinued if a deposit of up to INR 500 is not made in a year.
- You can’t take a loan on a PPF account before one year of its opening.
- A discontinued account can be renewed by paying a revival fee of INR 50.
- The interest is calculated at the lowest amount present in the account between the fifth day and the end of the month.
- The maturity period does not include the opening year. So, it is actually 15 years from the end of the first fiscal year.
- The account holder has an option to even extend the maturity period by 5 more years.
- Premature closure is allowed after 5 years from opening the account and in case of death or funds for education and change in resident status of the account holder.
- However, a deduction at an interest of 1% is made and then the remaining amount is paid.
Check out our article on What Are the Different Investment Alternatives Available to an Investor?
8 Factors To Consider While Choosing The Best Investment Options in India
Just knowing about all the schemes and the best investment options in India can not be enough to determine where to invest. There are so many factors to consider before investing, after all, you will be investing your hard-earned money into it.
So, now let’s focus on which are the most important 8 factors that you must look into to make the decision for the best investment options in India.
- First thing first, know your finances.
Before investing, analyze the funds you have. You should have a buffer amount to balance out any ups and downs in the market. And, you must plan for an emergency fund in hand before making any high-risk investments. Apart from this, analyze your expenses.
If you have a high credit card bill every month then it’s obvious your money leaves your bank account frequently! Prioritize your expenses.
- How much risk can you handle?
Ask yourself this question and create a roadmap. Understand that high-return stocks are very volatile. They can cause high losses on the same day of giving out a profit. If you don’t have the backup fund to cover up the loss and you are a new investor. You should consider investing in long-term funds with lower risk and lower returns.
- Have a diverse investment portfolio.
Look at all the types of investments you have made. Analyze the risk factor, return factor, period of maturity, the sectors they belong to, their performance in previous years, etc to figure out where the gap is in your portfolio.
If you have invested in a similar sector asset, then it’s obvious if one crashes all others will crash as well. Which is not good! So, investing in a combination of assets is the best option to reduce the risk.
- Do you have a mix of both, the traditional and new alternative assets?
Invest in tax-saving investment options first and then move on to other investments like mutual funds, bonds, stocks, corporate bills, etc. Creating a balance between bonds and fund investments is also a way to keep earning returns on one side and making volatile investments on the other.
- Analyze the technical aspects of the investments.
If you are investing in any company you must know its history of returns, dividend shared with its shareholders, the price-to-earnings ratio of the company, the Beta value of the company’s stock, and earnings per share (EPS) of the company.
After that, pick the best investment options that are of low risk or which align with your financial goal.
- Don’t fall for quick return scams.
Before investing in any company it is important to check the authenticity of such claims. It is quite common for people with less knowledge about investment and in need of money to fall for investment scams.
Do a background check about the company, their registration number, etc before making an investment decision.
- Do not invest carelessly in shares of employer and individual stocks.
Even though it’s your employer, it doesn’t mean it is not prone to risks. Don’t invest in the same asset category all the time. Invest in different sectors to minimize the risk of market depression.
- Allocation of money within the right period of time.
You will hear from all of the investors that they make stable returns from investments made for longer periods of time. Investment requires patience. The longer period of investments is related to gaining higher capital gains, because of the compounded interest rates.
Even though the market can look depreciating for weeks, a longer period of investment has the capacity to convert the loss into profit over the years. They have the ability to withstand the market’s ups and downs.
Still, the factor that matters most is your judgment! Do your research and analyze the investment options discussed in this article and select from the best investment options in India.
Here are the 10 Best Investment Plan With High Returns In India 2023.
FAQs: Best Investment Options in India
Why are solar projects considered one of the best investment options in India?
Solar projects are considered one of the best investment options in India. The renewable energy industry is an up-and-coming industry with a lot of growth prospects. There are many government schemes and factors such as affordability that make solar energy one of the best investment options in India.
What are the best investment options in India with high risk?
Some of the best investment options in India with high risk are:
- Equity funds
- Real estate
We hope that this article on the 7 Best Investment Options in India gave you a clear idea about the best investment options in India that give more returns than a regular fixed deposit. Investors are resorting to non-traditional ways of investments, in which renewable energy assets stand out the most as it gives quicker returns and is at low risk. Though other options of PPF, RBI bonds, Mutual funds, debt funds, etc can’t be neglected as well. The above options are a good mix to diversify an investment portfolio.
You have multiple choices available and if you are still not sure contact us, SustVest will help you become an investor in no time.
Founder of Sustvest
Hardik completed his B.Tech from BITS Pilani. Keeping the current global scenario, the growth of renewable energy in mind, and people looking for investment opportunities in mind he founded SustVest ( formerly, Solar Grid X ) in 2018. This venture led him to achieve the ‘Emerging Fintech Talent of the Year in MENA region ‘ in October 2019.