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10 Types of Investment Options to Consider for Financial Planning

dateKnowledge Centre Team dateOctober 06, 2021 views134 Views
Top 10 Investment Options | Essentials of Financial Planning

Before you invest your money and build an investment portfolio, it's important to understand all of your alternatives as an investor. Every investment has advantages and disadvantages. Among the various types of investments accessible, there are guaranteed to be a few that will perform well for you.

You might be confused about where to invest money for good returns in India. Let's have a look at the types of investments for beginners so you can determine what to invest in.

1. Stocks

Long-term wealth creation can be achieved by investments in equity markets or stocks. Finding the appropriate stocks to invest in requires a lot of research and caution. You must also carefully time your entrance and exit points, as well as maintain constant investment monitoring. Capital appreciation is a long-term process that is influenced by market volatility. The good news is that, in the long run, some equities have been demonstrated to outperform many other asset classes in terms of inflation-adjusted returns.

2. Fixed Deposits (FD)

Fixed Deposits are a low-risk financial instrument that allows investors to grow their funds at a fixed rate of interest that is higher than savings account interest rates. The ease of investing combined with the security of your deposit might make it simple to plan your short- and long-term objectives.

3. Bonds

Bonds are one of the debt investment options available in India. In exchange for a bond, investors give money to the issuer corporation, and the issuer is obligated to pay interest on the principal amount. The issuer is responsible for repaying the money borrowed, as well as a specified rate of interest. Variable rate of interest is also pretty prevalent nowadays.

4. Real Estate

Purchasing residential or commercial properties to allow your cash to increase or create consistent rental income is referred to as real estate investing. You'll have a continuous stream of revenue in the form of rent this way. Another option is to buy real estate units, keep them for a while, and then sell them for a greater price at a later date, resulting in a big return on your initial investment.

5. Mutual Funds

Mutual funds (MFs) invest in market-linked securities like stocks, bonds, or a combination of both equity and debt products. Depending on your financial goals and needs, you can invest in equity funds, debt funds, or balanced funds. You can also use a Systematic Investment Plan to invest small amounts in MFs on a regular basis (SIP).
Learn how to calculate SIP Returns.

6. Life Insurance

Life insurance provides financial security in the case of the policyholder's demise, as well as to function as a smart investment plan for achieving a number of life goals. The life insurance industry in India has been steadily growing as more people realise the importance of purchasing life insurance policies.

Life Insurance Plan | Buying Life Insurance during COVID-19

7. Savings Plan

A savings plan is a type of life insurance investment plan that allows you to save money while simultaneously investing and multiplying it in a systematic and disciplined manner. This methodical investment prepares an individual to meet his family's future financial demands and ensures the achievement of his financial objectives. Savings investment plans include numerous elements that can assist an individual in achieving his or her objectives, and it is critical to evaluate these features before selecting the best savings plan.

8. PPF-Public Provident Fund

Because of its numerous investor-friendly characteristics and accompanying benefits, the public provident fund is a popular investment option among investors. It's a long-term investing strategy that appeals to people who wish to make a lot of money while maintaining a steady income. The primary concern of those who register a PPF account is the safekeeping of their money.

9. Kisan Vikas Patra

Kisan Vikas Patra is an Indian post office certificate scheme. If you purchase the certificate between July 1 and September 30, 2021, your one-time investment will be doubled in around 10 years and 4 months (124 months). For example, a Kisan Vikas Patra purchased for Rs. 5000 will provide a postmaturity corpus of Rs. 10,000. We'll look at the features and prospects of this method in this essay.

Here’s all you want to know about Kisan Vikas Patra.

10. Gold

Possessing gold in the form of jewellery comes with its own set of concerns, such as safety and cost. Paper gold is a unique way to get gold. Investing in gold is more cost-effective and can be done through gold ETFs. When gold is the underlying asset, such investment (buying and selling) takes place on a stock exchange (NSE or BSE). Investors can also consider Sovereign Gold Bonds or gold mutual funds.

Choosing the best option for your investment plan is subjective and depends on various factors. The following factors should be considered when making investing decisions:

a) Age

Young investors typically have fewer responsibilities and a longer investing horizon than older investors. You'll need to change your investments as you get older.

b) Goal

Short-term and long-term investment objectives are both possible. Some of your requirements may be negotiable and others may not be. If these assets perform well, you may be able to meet your goals much sooner than expected.

c) Profile

Your income and the amount of financial dependents you have are other key considerations.

Alternatively, you can buy ULIP of Canara HSBC Oriental Bank of Commerce Life Insurance. You can choose the Invest 4G Plan, which is a Unit-Linked Insurance Plan that allows you to diversify your investment portfolio while also providing life insurance protection. Due to the profits that you can expect when you buy life insurance plans, they can be extremely useful for you throughout your retirement.

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