Best Investment Options in India for 2022-23

Direct equity stocks are one of the best investment options for aggressive investors. Investing in listed equity stocks of companies on the stock exchanges is known as Direct Equity investment. You can get capital gains or dividend returns from the direct stock investments. Performance of stocks depends on factors such as market position, company’s performance, etc.

You need to have a bank account and a Demat account to start investing in this. Also, if you want to invest and benefit from stock investments consistently, you must have a high risk appetite. Understand the functioning of equity stocks and markets before you start investing.

Equity mutual funds are primarily invested in equity stocks and related securities. These are one of the best investment options in India for small investors who want to benefit from equity market growth. You can start investing in well-diversified portfolios of equity stocks with as little as Rs 500 through equity mutual funds.

These funds can invest anywhere between 70 to 95% of the fund value in equity stocks and related instruments. Since these are equity-based, they offer a high risk-return ratio. Typically, there are two types of equity mutual funds:

Debt mutual funds or bond funds are investment options to consider if you do not have a high-risk appetite or want to avoid volatility. These are also a diversified portfolio of fixed-income securities.

In Debt Funds, the amount is invested in fixed-income securities including government and corporate bonds, debentures and other long-term fixed-income securities. Depending on the type of securities held in the portfolio, funds can have a varied risk profile. You should check the ratings of the securities held by the fund to assess the risk before investing.

Funds with top-rated securities or government bonds are suitable if you want the stability of returns with less risk. Thus, you can consider debt funds when:

Note that the risk of changing interest rates will still be present in all debt funds.

National Pension System is one of the government backed investment plan designed to help you secure your retirement financially. It is regulated by Pension Fund Regulatory and Development Authority (PFRDA).

This helps you to create a strong retirement corpus at your disposal. You can use the NPS retirement account as a salaried or self-employed investor.

There are two types of NPS accounts

The primary difference between NPS and other provident fund investments is that NPS allows you to build your corpus aggressively. It follows an auto-rebalancing method to maintain a portfolio with a declining risk as you age. Additionally, you can avail of a deduction of up to Rs 2 lakhs for your contribution.

The risk-return on NPS investment will depend on the portfolio mix you choose and the length of time you stay invested. Thus, this retirement investment option works well for both risk-averse and aggressive investors.

PPF is one of the most popular and best investment options for people considering to put their money into safe investment options. The 15-year plan is the best investment plan to safely achieve your long-term life goals. Originally, introduced as a safe retirement investment plan for self-employed, the plan has been popular for long-term investors, because it provides:

Know more about Public Provident Fund.

Bank fixed deposit is another popular investment options in India that ensures the safety of your money and provides stable returns. You can invest a lump sum amount and it will offer a fixed rate of interest for a specific term. After your term is over, you will receive the principal with compound interest added over the term.

Consider the following things while investing in a bank fixed deposit:

Senior Citizen Saving Scheme or SCSS is one of the investment options, which help investors fulfill their retirement goals as it helps generate a stable income. It is one of the small saving investment options and you can invest a lump sum in this scheme after turning 60. You will receive a fixed interest pay-out every quarter.

You can open an SCSS account in 2 ways:

It is a very popular investment option for senior citizens due to its guaranteed and attractive returns. The current rate of returns is 7.6% (Q3 FY 2022-23). These rates are subject to change quarterly.

Here are some features of SCSS you should know:

A Unit Linked Insurance Plan (ULIP) can be considered as an investment option as it provides insurance along with an avenue for investment. A part of the premium paid by the policyholder goes toward the life cover, and the other part goes towards the funds chosen by the policyholder. This life insurance plan offers market-linked returns, and hence, an investor should weigh in both the pros and cons of the plan before investing in it.

Canara HSBC Life Insurance Invest 4G is a ULIP that offers life cover and market linked returns. It has 8 fund options to choose from with partial withdrawal option.

Real estate is a good investment option in India. It is, however, usually a big-ticket investment. The investment refers to buying properties such as homes, plots and land. This is one of the best investment options that can help you combat inflation. Investing in this can give you a shot at both regular as well as capital gain income.

You can put the building you have purchased for rent and earn a secondary income. This will ensure that you get monthly rent in form of returns. If your property has appreciated, then you can sell it for a higher price and can get a capital gain.

There is a famous saying that there are 3 things important in real estate and they are, ‘location, location, location’. This is the predominant factor that decides the success of your real estate investment.

Having real estate at a good location may be expensive but can also get you a higher price for rent and has better chances of appreciation.