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Investment Options

Top 10 Best Investment Options with High Returns

Making smart investments can help you generate income by putting your money to work. While you may work hard to earn money, it may not always be enough to fulfil your dreams and goals. To start investing, you can consider either growth-oriented or fixed-income investment instruments.

People often get confused between savings and investments, which play different roles in your personal financial planning. While both savings and investments are important, they have different objectives. The intent or purpose of keeping the money aside is the first differentiating factor.

You usually save money to keep some money aside for emergencies. However, investing is when you put this money to work for you in smart investment avenues, with the hope to generate wealth for the future.

Savings and investments vary in the way your wealth is accumulated. While savings are considered as a passive way of wealth accumulation, well-planned investment strategies can help in accumulating more wealth.

Types of Investments

Before you start investing, it is best to understand the different types of investments. For most investors, investments vary in terms of risk levels – low risk, medium risk and high risk. Here’s a look at these investment options in detail:

Low-risk investments – These are instruments which pay fixed income – irrespective of the changes in the business or economy. Bonds, debentures and fixed deposits come under this category. Also, special investment vehicles – PPF, EPF, SCSS, Sukanya Samriddhi, National Savings Scheme and other small Post Office Schemes which are created by a government statute for specific purposes are low risk as they guarantee the returns. The returns are periodic and pre-determined.

Low-risk investments are not linked to the stock market movements and are usually governed by the interest rate movements of the financiers. However, there is always the returns are always guaranteed.

Government bonds and life insurance policies provide good returns, however, they have long lock-in periods. So, you will have to wait for a long time to earn substantial returns from these investment options. Fixed deposit is one of the very few low-risk investments that offer stable, high returns and immediate liquidity.

Medium-risk investments – These are investments which might have a certain percentage of risk but these also pay higher returns to investors willing to invest in them. Debt funds, balanced mutual funds, and index funds fall in this category. Such instruments do have an element of debt and stability, but they have their volatility linked to the markets which can hamper your principal amount. The irregularity in earnings can make any fixed income from such investment impossible.

High-risk investments – These are investments where there is no limit to the upside along with the downside of risk-returns. These are stocks of companies, equity mutual funds, even stocks, and derivatives. The return on these instruments can give huge returns as well as chances of losses depending on various external factors to the company and internal ones. The quantity and timing of returns on these instruments are not fixed. Hence, they are at high risk.
 

Best Investment Options in India

Here is a look at the top 10 investment options Indians look at while savings for their financial goals

  • Stocks – Buying shares of companies is a one time investment plan. It is one of the easiest ways to invest your money in any business. These are part ownership units of the company which each investor buys. You can trade these shares in a marketplace called the Stock market where all trades are done electronically. It is one of the most lucrative and riskiest investment options to buy.
  • FDs – These are the safest investment where you are assured fixed interest at fixed intervals of time. It provides options for investing and flexibility to pay. Fixed deposits are offered by banks and NBFCs (non-banking financial companies). Short term investment plans with fixed deposits can help you protect your funds against inflation.
  • Mutual Funds – These are collective investment vehicles managed by a fund manager which pools people’s money and invests in stocks and bonds of various companies and create a return. They are in the same category of risk as stocks, though slightly less.
  • SCSSSenior Citizens’ Saving Scheme is an investment plan for those above the age of 60 years. It is a government sponsored, long-term saving option which has been designed keeping in mind the requirements of retirees. This investment option pays a high and steady rate of interest as prescribed the government from time to time.
  • PPF – Public Provident Fund is one of the most common and trusted investment plans in India. It pays interest rate annually and requires a minimum of Rs 500 per annum investment. It has a life of 15 years with partial withdrawals allowed of the corpus at various points. This option also pays a high and steady rate of interest as prescribed the government from time to time.

Here’s a comparison of various types of investment options.

Top 10 Best Investment Options In India

  Risk Tenure Liquidity Returns
Direct Equity High Can be sold anytime High Market-linked
Equity Mutual Fund Moderate-High Open end* High Market-linked
Real Estate High Can be sold anytime Low Market-linked
Gold Low-moderate Can be sold anytime Varies Market-linked
PPF No risk 15 years Partial withdrawals** 8.00 percent
Bank fixed deposit Low 7 days to 10 years Premature exit Varies
Debt Funds Low-high Open end High Market-Linked
RBI taxable bonds No risk 7 years Low 7.75 percent
NPS Low-high 60 minus entry age Limited Market-linked
Senior Citizens’ Saving Scheme No risk 5 years Low 8.70 percent
*ELSS comes with 3-year lock-in         **Subject to conditions
For physical gold, paper gold and debt funds, long term is 3 years. For real estate, long term is 2 years

Why is Bajaj Finance FD The Best Investment Option?

Looking at various options, FDs have been the favoured choice of investment for people all along. From ease to flexibility and various options, FDs are a boon to investors of all age groups and income levels. While bank FDs are governed by each bank’s assets and liabilities situation, company FDs pay higher interest than bank FDs. Bajaj Finance FD offers secure and stable growth for your savings. It is one of the best investment options for investors across all categories due to following reasons:

  • High Interest Rates - The interest rate offered is one of the highest in the Indian financial market. It is usually 1-2% higher than bank FDs at the same tenor. Bajaj Finance FD offers 8.60% interest rate for 3-5 years. FD interest rate for senior citizens is 0.35% higher than regular FD interest rate. Also, you can earn an additional 0.25% on renewals.
  • Credit Rating - You can be assured with the stability and safety of your investments as it is rated MAAA (stable) by ICRA and FAAA/Stable by CRISIL.
  • Cumulative and non-cumulative options - You can choose from cumulative or non-cumulative interest payout, based on your requirements. The cumulative option allows further investment of interest along with the principal and gain higher interest. This is a great option for building a corpus for the long term. The non-cumulative option allows fixed interval payouts – monthly, quarterly or annually which can help meet expenses.
  • Ease of laddering - Bajaj Finance FDs can be utilized with laddering – you can make multiple FDs at fixed intervals to achieve maturity in a continuous stream. You can choose tenor between 12 months to 60 months tenor to suit your needs.
  • Minimum investment amount - You can start with an amount as low Rs. 25,000 without affecting your budget.
  • Loan against FD - You can avail a loan against your FD offering liquidity and ensuring you have money during emergencies.

 

Fixed Deposit Interest Rates 2019

Tenor in Months Minimum deposit (in Rs.) Cumulative Non-Cumulative
Monthly Quarterly Half Yearly Annual
12 – 23 25,000 8.00% 7.72% 7.77% 7.85% 8.00%
24 – 35 8.15% 7.88% 7.93% 8.00% 8.15%
36 – 60 8.60% 8.28% 8.34% 8.42% 8.60%
Special tenors scheme
15 1,00,000 8.05% 7.77% 7.82% 7.89% 8.05%

How to Invest?

This is one of the most basic questions that people ask along with where to invest. The answer to both these questions depends on your earning and spending. First, analyse your financial goals and how much money you require in each time frame. A certain portion of your portfolio should always be in a stable and safe investment option like FDs. You can determine the amount and invest per each time frame.

Now you make an online investment in fixed deposits online from the comfort of your home. Research a bit to find out what are the best available options for you and start investing. All the best!

Do you plan to invest in FD? Find out how to open an FD account.

For more information on investment ideas, how to invest and various requirements, please get in touch with us.