Various long-term investment plans with high returns in India
Gold
While gold does not offer monthly dividends, what it does help you do is preserve your wealth. This may be for yourself or generations after you. Given how inflation is constantly on the rise, investing in gold is an excellent long-term investment option. While the currency's value may be on a downward slope, if you invest it in gold now, you can benefit from its increase in value over time. If you are a beginner to investments, this can make for a good start.
Public Provident Funds (PPFs)
It may seem like PPFs are not a great investment option, especially since the interest rate has been reduced to 7.10%. But, since the income accrued from it is tax-free, it remains a great long-term investment option. This is because while other investment options may offer a higher rate of interest, the post-tax amount you receive is likely to be much lesser than that offered by your PPF. If you are looking to build a financial cushion for yourself at retirement, PPFs are a sound investment option.
Mutual funds
Investing in mutual funds is excellent if you are in it for the long run, especially equity mutual fund schemes. You can invest as little as Rs. 1,000 and diversify your investment portfolio. This helps significantly reduce your risk. If you are looking at mutual funds as a long-term investment, it is essential to ensure that you pick a good mutual fund.
Think of it this way, even if a great author pens a few poorly written essays, on the whole, he will be viewed as an excellent wordsmith. Picking a good mutual fund works similarly. There may be some lean periods that are beyond your control, but on the whole, you will reap gains at the end of the long-term.
Stocks
There is no denying that investing in stocks is a good investment option. However, examine data on stocks, and you will find that if you invest in them for the short run, the chances of you making a loss are higher. But, if you hold on to stocks for a long period of time, it will help you make a neat profit at the end of the period. This is because the gains overshadow the odd loss.
Fixed deposits
Fixed deposits are a favorable long-term investment option for many because of their security. Since an FD is not dependent on market fluctuations, it offers assured returns. While fixed deposits are of two types—bank FD and company FD—the latter offers a much higher rate of interest. Other major benefits of company FDs are that they are tax-free if the income accrued from them is less than Rs. 5,000 per year. They also offer more flexibility with regard to tenure.
Life insurance (Savings & Investment Plans)
Life insurance is not just about protection—it can also be a powerful long-term investment tool. Plans like Unit Linked Insurance Plans (ULIPs) and endowment policies allow you to grow wealth while securing your family’s future. ULIPs, for example, combine life cover with market-linked investments, helping you earn competitive returns over 10–20 years. Meanwhile, guaranteed savings plans provide stable returns along with tax benefits under Section 80C and 10(10D). If you are looking for a mix of security, savings, and long-term growth, life insurance makes an excellent addition to your portfolio.
Unit-Linked Insurance Plans (ULIPs)
ULIPs are insurance-cum-investment products that offer both life cover and investment opportunities. In India, ULIPs provide a wide range of fund options, including equity, debt, and balanced funds. They offer the potential for high returns over the long term. Additionally, ULIPs provide tax benefits for maturity proceeds, making them attractive for those seeking insurance coverage alongside wealth creation.