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Best 3-Year Investment Plans To Boost Your Income

  • Highlights
  • FDs, FMPs, ELSS, and Liquid Funds are popular investment options

  • Annual returns for liquid funds range between 8.37% to 8.46%

  • Invest in FDs for high stability and safety of your funds

  • Company FDs offer higher interest rates than bank FDs

Locking up your funds is never a good idea. This is because over time the purchasing power of your money declines. Even if you are setting aside funds for use during emergencies, invest them in 3-year investment plan with high returns. This will help multiply the money and will yield in inflation-beating returns.

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A 3-year timeline is one of the most looked at to measure the “long term” returns. While people should wait for five years or more for equity and mutual funds to start showing real returns, usually people decide investments based on a 3-year return history.

Also, practically, it is easier to plan for a 3-year horizon and try and find appropriate investments with a similar maturity.

Be it your child’s education or plan to renovate your house, a 3-year horizon seems more plausible than a longer one.

Benefits of Investment Plans

Having a sound investment plan has the following benefits:

  • Get a better understanding of what your net financial net worth is, and how you can improve it further

  • Manage your income effectively, by diverting it at the right sources

  • Prioritising your expenses and checking your assets, while discarding your liabilities

  • Fund your requirements, and evade debts

  • Increased preparedness for emergencies and unforeseen circumstances

  • Increased self-dependency as your financial goals are well-aligned with your personal goals

An ideal financial blueprint is one that not only defines goals, but also gives you means of achieving them. It even takes into consideration your personal circumstances, as well as your risk appetite.

An investment plan should break your financial aspirations and necessities into time-bound goals. These are financial goals, and your investment allocation should be done such that as and when you are nearing your goal, the money is available through one of your investments.

8 Best Investment Plans in India with High Returns

Here is a list of best investment options in India that guarantee high returns:

  • 1. Saving Account

  • 2. Liquid Funds

  • 3. Short Term & Ultra Short Term Funds

  • 4. ELSS

  • 5. Fixed Deposits

  • 6. Fixed Maturity Plans

  • 7. Treasury Bills

  • 8. Gold

Best Investment Option in India for 3 Years

1. Savings accounts:

Get returns of 4-6%, with least risks, so there is no chance of decline in your principal. You can also grow the value of your savings, which remain unaffected by the influence of market forces.

2. Liquid funds:

With a tenor of less than 91 days, liquid funds are types of debt mutual funds that give you the advantage of liquidity. You can easily withdraw your funds at your will, and enjoy easy access to your money. With attractive interest rates, you can expect higher returns and greater liquidity.

However, it is best to park only a portion of your surplus money in liquid funds, as there are several tax implications.

Additional Read: Best Short Term Investment Plans

3. Short term and ultra-short-term funds:

These are also debt mutual funds with a longer maturity period, where duration ranges between 90 days to 3 years. Due to comparatively longer tenors, these funds protect the investments against falls in the interest rates.

As a result, they are more stable as they charge an exit load. Returns on short term debt funds are attractive for those falling in a higher tax slab as opposed to bank fixed deposits. However, both short term and ultra-short-term funds are affected by market volatility, unlike fixed deposits.

Behtar nahi banate toh aage kaise badhte


Equity Linked Saving schemes are the tax-free funds with more than 60% investment in equities. They have a lock-in of 3 years to allow the fund to grow as no redemptions are allowed. These convert into open-ended funds after 3 years – which means you can sell them and redeem them for use. You can take a call depending upon your goal and the returns you are receiving from the fund.

5. Fixed deposits:

Fixed deposits are often hailed as one of the most stable and safe investment options for 3-year investment period. It is advisable to invest in various FDs because of the following reasons:

  • Accumulate higher returns by availing FD schemes from credible financiers

  • Hassle-free renewals provide you the benefit of compounding, and help you increase your savings

  • Deposit Credit Guarantee Corporation of India insures all bank FDs up to Rs.1 lakh, which ensures better security

  • Greater stability, where you needn’t fear about depreciation of your principal amount

  • Assured returns and greater liquidity


Bajaj Finance now offers fixed deposit schemes at the highest interest rate with guaranteed returns on your investments. With Bajaj Finance FDs, which at least paying 1-2-% more than bank FDs, you can create a smart chain of FDs at equal intervals which will mature at periodic intervals in the future. These can be placed one year apart until three years, and you can benefit from maturing FDs from the third year. Laddering your investments in such a manner will allow you to achieve your financial goals one by one without any issue of availability of cash.

With high interest rates from Bajaj Finance FD, you are sure to earn a good return on investment which will provide you enough to meet your goals comfortably.

You can also choose the non-cumulative option which will give you a payout at regular intervals chosen by you – monthly, quarterly or bi-annually.

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You can also opt for company fixed deposits as they offer a higher rate of interest as compared to bank fixed deposits. This makes them a lucrative option. You can also calculate the returns on your investments, by using a fixed deposit calculator.

Additional Read: Best FD Plan

6. Fixed maturity plans (FMPs):

These are also close-ended debt mutual funds with a maturity period that extending up to five years. FMPs invest in debt or money-market instruments that have the same maturity period as the plan itself. If FMP tenor is three years, it means it will invest your money in those debt instruments that expire at the 3-year mark. FMPs are most sought after at the end of the financial year as they offer greater tax advantages. But, FMPs have their disadvantages too – especially in terms of less liquidity.

7. Treasury bills:

Government can raise money by issuing Government Bonds or Treasury Bills, wherein treasury bills are for a shorter tenor, and government bonds are for a longer period of 5-10 years.

Government can raise money by issuing the following two types of instruments:

  • Government bonds

  • Treasury bills


Treasury bills are for a shorter tenor, and Government bonds are for a longer period of 5-10 years.
Treasury bills have gestation periods of 91 days, 182 days and 364 days. They are issued at a discount and are redeemable at face value (which is more than the reduced amount) on maturity. They offer good returns too. The only drawback is that you have to invest in multiples of Rs. 25,000 to buy them from the government.

8. Gold:

There are three ways you can invest in gold:
Physical form: It is mandatory for you to have a PAN Card
Exchange-Traded Funds (ETFs): Gold ETFs are mutual funds where each unit represents 1g of gold, either in its physical or electronic form.
Sovereign gold bonds: These offer a high rate of interest, without the risk and hassle that comes along with purchasing physical gold. These bonds do not attract tax after you redeem them.

Additional Read:
GST On Gold
How to apply for PAN Card Online

After the 2008 financial crisis, gold prices increased twice in three years and have risen to almost three and a half times since then. This is because after the world’s economy collapsed, investors began to take protection in gold. Through diversification, gold helps to keep your portfolio intact.

Tax Implications on Investment Plans in India

When you’re planning your investments and finances, it is imperative to consider the impact of taxation on your capital too. For example, deposits are applicable for TDS if the interest income on your FD exceeds Rs. 40,000 in a financial year (Rs. 50,000 if you are a senior citizen). The profits you make from mutual funds are also governed by different tax regulations. With a company FD, you can avail a TDS exemption of Rs 5,000.

Mostly, all kinds of debt mutual funds attract short-term capital gains tax as well as long-term capital gains tax. All these taxes have an impact on the returns your investment is gathering, so be mindful of the taxation aspect as well.

A good way to offset tax deduction is to invest in high-paying company FDs such as Bajaj Finance Fixed Deposit, which offer high returns that can appropriately balance out tax deduction.

DISCLAIMER: The mentioned fixed deposit interest rates are indicative only, and may be subject to change periodically. Please check the interest rates on our website.

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