Where to invest money? Which are best investment options in India? These are commonly asked questions with varied answers. For conservative investor fixed investment instruments are best investment options while for aggressive investor stock market best investment option. Whatever is the case one thing is sure that it is better to invest money rather than keeping it idle. Investment helps you to meet your financial obligations like children education, post retirement expense, children marriage etc. It also helps you to achieve financial freedom at a long run. In short, investment is making your money work for you. Keeping these thoughts in mind 10 Best Profitable Investment Options in India are given below.
10 Best Profitable Investment Options in India
- Start Up
Investment in a startup is risky yet profitable investment option in India. Startup companies are like rising sun with huge upside potential and increase in valuation. There are many examples where people have earned a lot of money by investing in startup companies. The example like employee becoming crorepati by opting for ESOP in Flipkart during a startup time is known to everyone. Few famous investors like Ratan Tata and Rakesh Jhunjhunwala also consider start up as a profitable investment option.
Who should invest in Startup?
The startup is slightly risky investment option. A person with excess cash and high risk taking capacity can opt for investing in the startup.
- Stock Market
A stock market investment is another best investment options in India. Stock market investment can make you wealthy in short period of time. There are many examples of Mutlibagger stocks like MRF, Caplin Point Laboratories, Infosys, TCS that have made investor wealthy over a long run. However, it is difficult to identify good stock for Investment. If you a skill to identify future multibagger stock for the investment you should invest in stock market.
Who should invest in Stock Market?
Knowledge and skill are must for stock market investment. If you have knowledge, skill and high-risk taking capacity you can plan to invest your money in stock market.
- Mid Cap & Small Cap Mutual Funds
Mid Cap & Small Cap Mutual funds are one of the most profitable investment options in India. In last one year, few mid cap & small cap mutual funds have generated more than 40% return for the investor. You can opt for Systematic Investment Plan (SIP) or lump sum method for investment. It is better to select the direct mutual fund for investment. Direct mutual fund always gives you better return compare to normal mutual funds.
Who should invest in Mutual Fund?
If you want to balance risk and return mutual fund investment is for you. You can expect very good returns from mutual funds over a long run.
ELSS or Equity link saving scheme is next best investment options in the list for tax saving. ELSS is a type of mutual fund that helps you to save tax and generate a wealth. ELSS can generate 20-25% returns for the investor. However, ELSS comes with lock in period of three years.
Who should invest in ESS?
If you are looking for Tax saving option along with wealth generation ELSS is for you. You can claim deduction up to 1.5 Lakh by investing in ELSS.
PPF or Public Provident Fund is most popular investment option in India. PPF offers an interest rate of 7.8%. PPF investment also offers tax benefits under section 80C. The PPF matures in 15 years. You can withdraw money from PPF account after 6 years.
Who should invest in PPF?
PPF is particularly relevant for individuals with a low-risk appetite looking to save money over the long term for retirement planning or any other long-term financial goal. A high-risk investor can also invest in PPF to balance their portfolio.
- Peer 2 Peer Lending
Peer 2 Peer Lending is new investment option in India. In this option, you need to lend money to individual or business through online services. You can expect 15-20% gain by lending money. However, it is risky investment option as a chance of losing money is high.
Who should invest in Peer 2 Peer Lending?
An investor with excessive cash and high risk taking capacity can opt for Peer 2 Peer lending option. You need to carry out due diligence before lending money to anyone.
- Real Estate
Real estate is profitable investment option over a long run. Real estate has many prospects like hospitality, commercial, retail, housing, manufacturing. However, money required for making an investment in real estate is huge. You can expect a decent return from real estate over a long run.
Who should invest in Real Estate?
If you have excess cash and you have exhausted by making an investment in other investment options you can invest in real estate. Real estate investment is nonliquid in nature and may require black money for investment.
- Company Fixed Deposit
Company Fixed deposit is beneficial investment option in comparison to the bank FDs. A company fixed deposit give superior return compare to normal bank FD’s. These types of FD comes with lock in period hence, you need to be careful in a section of the investment period. Company insurance scheme is not backed by Insurance.
Who should invest in Company Fixed Deposit?
A conservative investor looking for risk return balance and long term fix gain can invest in company fixed deposit. You can expect 12-14% gain from company fixed deposit.
- Post Office Savings Schemes
Post office saving scheme is also on the list of best investment option in India. The post office offers multiple schemes for investment based on investors need. You can opt for Monthly Income Scheme, Recurring deposit, Sukanya Samrridhi Scheme for investment. All these schemes offer a return in the range of 8.5-8.7% return.
Who should invest in Post Office Saving Schemes?
If you are a conservative investor looking for the fixed return you can plan to invest in post office saving schemes. You cannot gain hefty returns from this schemes. However, your capital would be protected.
The last best investment options in the list is Bonds. If you are not comfortable in investing in risky investment options you can invest in bonds. There are several good bonds in the market that provide a high return on investment. Bonds are regulated by the government. A 10-year bond typically offers 8% interest.
Who should invest in Bonds?
A risk averse investor looking for long term fix gain can invest in bonds.
How to select best investment options?
The following Matrix will help you in the selection of Best Investment Options.
You should consider following factors for the selection of Best Investment Options.
- Investment Objective – You should be clear about your investment objective before making an investment.
- Tenure – Second point for consideration is tenure. Investment options are different for long term and short term.
- Risk Taking Capacity – Another factor that matters for the selection of investment option is risk taking capacity. If you are high risk investor you can consider equity or real estate for the investment.
- Tax – Tax is another important factor in the selection of Investment. Tax saving options are different compared to normal investment options.
- Liquidity – Your requirement of cash can affect the selection of investment option. Some investment options do not provide liquidity. Make sure to select right investment option as per your need.