10 Best Investments Plans for Long Term
An investment plan is a financial product that helps you grow your money over time to achieve future financial goals. In India, you can choose from various types of investment plans, such as mutual funds, life insurance, Public Provident Fund (PPF), and bonds, with each serving a specific financial need. These plans allow you to invest in different asset classes like equity, debt, and government securities, which all vary in risk and return potential.
The plan you select should align with your financial goals, investment duration, and individual risk appetite (low, medium, or high). By using a mix of different investment plans, you can diversify your risk and improve your chances of achieving stable, long-term returns.
Direct Equity
Direct plans allow you to save money by avoiding commissions and marketing costs. These savings are then invested back into the plan, potentially leading to higher returns over time.
Mutual Funds
Mutual fund dealers make it easy for you to compare various funds based on risk, return, and price. This accessible information helps you make informed decisions. Mutual funds also provide the advantages of liquidity and expert management. Investing in an ELSS can offer tax benefits under section 80C. Remember to consider the impact of mutual fund fees on your returns.
Bonds
Bonds are low-risk, fixed-income securities that provide investors with a steady income stream. They help investors diversify their portfolios and balance high-risk investments. Many government bonds offer inflation-adjusted returns, making them a stable investment for the future.
Sovereign Gold Bonds (SGBs)
Sovereign Gold Bonds (SGBs) are government-backed securities issued by RBI. They are denominated in grams of gold. They offer a secure and affordable way to invest in gold without the need for physical storage. With fixed interest rates and a maturity period of 8 years, SGBs provide investors with both capital appreciation and periodic interest income.
REITs (Real Estate Investment Trusts)
REITs are companies that own, operate, or finance income-generating real estate across various sectors. They offer a unique opportunity to invest in real estate without the need to directly own property. REITs are required to distribute a large portion of their taxable income to shareholders as dividends, making them attractive for income-focused investors. They provide portfolio diversification, potential for capital appreciation, and a hedge against inflation. In a best investment plan, REITs can offer exposure to real estate markets with the liquidity of publicly traded stocks, making them a versatile investment option.
Public Provident Fund (PPF)
PPF is an ideal investment option for risk-averse individuals as it provides capital protection. It is a government initiative to mobilize small savings for investment and returns. If you are looking for an investment vehicle with guaranteed returns and tax savings, PPF is the right choice. The investment is for the long term with attractive returns. The returns earned and maturity proceeds are tax-free. You can claim a deduction of amount deposited in PPF up to ₹ 1.50 lakhs under Section 80C* of the Income Tax Act, 1961.
The minimum annual investment is ₹ 500, and the maximum is ₹ 1.50 lakhs. The investment can be in instalments or a lump sum. To calculate your potential returns at the end of the tenure, a lumpsum calculator can help you estimate the final amount you’ll receive. The maximum tenure is 15 years. On completion of the tenure, you can either close the account or extend it in blocks of 5 years with or without additional contributions.
Corporate Bonds
Corporate bonds are debt securities issued by companies to raise capital for various purposes. They offer potentially higher yields than government bonds, making them attractive for income-seeking investors. These bonds come with a fixed interest rate and maturity date, providing predictable income streams. However, they carry a higher risk compared to government bonds, as their safety depends on the issuing company’s financial health.
National Pension Scheme
It is a government-organized pension product for the employees of all the sectors in India and offers plans based on equity debt, corporate debt and government bond. In NPS a minimum contribution of Rs 6,000 a year is required while there is no upper cap.
Is NPS a good investment? Many financial experts consider NPS a beneficial long-term retirement savings tool due to its low-cost structure, good returns, and tax benefits.
Meanwhile, HDFC Life offers various saving and investment plans for securing your finances and helping you build your financial base, complementing your long-term wealth creation strategy.
National Savings Certificate (NSC)
National Savings Certificate (NSC) is a savings option by government which is backed by fixed-income investment scheme offered by India Post. You can get guaranteed returns from this financial tool.
Real Estate Investment
Investing in real estate in India is highly rewarding because the market is expanding, and there is significant potential for growth and development.