- Public Provident Fund (PPF)
- National Pension System (NPS)
- Equity Linked Savings Scheme (ELSS)
- Tax Savings Fixed Deposit
- Direct Equity Investment
- Mutual Funds
- Commercial Real Estate
- Initial Public Offer (IPO)
- Fixed Deposit
Here is the list of the 26 best investment plans in India 2021
#1. Public Provident Fund (PPF)
One of the most secured long- term Capital investment option amongst all the investment options in India. The invested money is locked for the term of 15 times. A Public Provident Fund (PPF) account can be opened in a post office or Bank. It’s tax-free. Also, in this investment option, you can earn composite interest on the accumulated money. You can also extend the time for the coming five years. The only drawback of having a Public Provident Fund (PPF) account is that you can withdraw the invested money by the end of 6th year. In case you need the money, you can take a loan on the balance of the Public Provident Fund (PPF)account.
Financial Year
Rate
2012-2013
8.80 %
2013-2014
8.70 %
2014-2015
8.70 %
2015-2016
8.70 %
2016-2017
8.10 %
2017-2018
7.60 %
2018-2022
7.60 %
Features of Public Provident Fund
- Being a government- backed scheme, Public Provident Fund (PPF) the principal along with the interested amount in the Public Provident Fund (PPF) account is safe and guaranteed.
- Upon the investment, it has a lock-in period of 15 years. The lock-in period can also be extended for over to 5 years post the completion of the lock-in period.
- On an periodic base, the lowest premium amount to be invested is Rs 500 up to Rs1.5 lakh.
Public Provident Fund (PPF) also provides the benefit of serving loans against the amount of investment.
#2. National Pension System (NPS)
NPS is a pension scheme that is portable across jobs and locations. You do not have to change your fund while changing your job or city.
All your contributions up to Rs. 1.5 Lacs into Tier I capital are exempted under section 80C.
Being one of the best investment option, which is government- backed that offers pension results. The budget invests in, bonds, government securities, equity and other investment alternatives as per the investor preference.
you can claim any additional self contribution up to Rs. 50,000 of tax benefits under section 80CCD(1B).
So here you can save Rs. 2 Lacs of tax.
It offers two options- auto and active. Under the auto option, the finances are invested automatically in different assets, whereas the active option enables the investor to invest in assets as per their choice.
The cinch-in period depends on the investor’s age, as the scheme only matures when the investor turns 60.
As per this scheme, the accumulated interest is tax-free. And when one chooses for the lump- sum payment upon maturity, 40 of the maturity proceeds are tax-exempt.However, the amount is taxable as regular income, If one opts to receive the pension post maturity.
Features of National Pension Scheme
- When investing in an NPS (National Pension System) it provides the elasticity of choice between auto and active.
- NPS (National Pension System) also permits the investors for partial withdrawal of finances.
- NPS (National Pension System) lets you remain independent truly after you retire.
#3. Equity Linked Savings Scheme (ELSS)
You get a higher return of 15% to 18% while investing in ELSS. Investment in ELSS funds have a lesser lock-in period of 3 years and any earnings over and above Rs. 1 Lac are taxable.
What’s Equity Linked Savings Scheme (ELSS)?
ELSS is a diversified, open-concluded Equity Mutual Fund that offers higher returns as well as great tax benefits. The duty immunity are offered as required under Section 80C of the Income Tax Act. A major part of the capital is invested in equity funds. The lock-in period applicable on these funds is 3 years and the investors can exit the scheme by retailing it after this period.
Who Can Invest in ELSS?
ELSS is a good option for investment for individuals who are at early stages in their careers. Individuals who don’t earn glamorous salaries and want to make investments in products that carry relatively low threat can consider ELSS. This scheme is also ideal for investors who earn substantially through some form of high- threat investments and require a means to save on tax.
ELSS has no age Limit, so individuals can start investing as soon as they start earning. ELSS can also work actually well for individuals who are looking for diversity in their investments by investing in the top three or four high- performing ELSS so as to accurate impressive returns over a period of time.
#4. Tax Savings Fixed Deposit
The interest rates vary from bank to bank and are in the range of 5% to 7.25%.
Fixed Deposits: Tax Saving FD for Sec 80C Deductions – Benefits & Interest Rates, Risks, Limits
You can get a tax deduction under Section 80C of over toRs.1.5 lakh when you make an investment on a tax- saver FD scheme with a minimal lock-in period of five years.
Fixed Returns : Though the returns won’t go south and a particular return percentage is guaranteed, the concept hinders the possibility of earning higher returns.
Lock-in Period FD (Fixed Deposit): accounts come with a specific lock-in period that’s chosen by the customers themselves.
Limited Tax Benefits : Though a 5- year tax- saver FD account is chosen by individuals to save tax in a safer way, the returns from the account are taxable under the Income Tax Act. The investment can be liquidated before maturity only at the cost of a penalty on the interest rate.
#5 Direct Equity Investment
Direct investment is commonly referred to as (FDI) foreign direct investment . (FDI) foreign direct investment refers to an investment to acquire a controlling interest in the enterprise in a foreign business enterprise designed. The direct investment provides capital financing in exchange for an equity interest without the purchase of regular shares of a company’s stock.
All the equity investments carry higher risks and therefore capable of generating very high returns. Opt for an equity investment option if you are comfortable losing as much as 50% of your capital.
#6. Mutual Funds
Equity mutual fund
Equity mutual fund schemes generally invest in equity stocks. As per current the Securities and Exchange Board of India (Sebi) Mutual Fund Regulations, an equity mutual fund scheme must invest at least 65 percent of its means in equity and equity- related instruments. An equity fund can be passively actively managed managed.
In an actively traded fund, the returns are largely dependent on a fund director’s capability to generate returns. Index funds and exchange- traded fund (ETFs)
Debt mutual fund
Debt mutual fund schemes are suitable for investors who want steady returns. They’re less volatile and, hence, considered less risky compared to equity finances. Debt mutual finances primarily invest in fixed- interest generating securities like corporate bonds, government securities, storeroom bills, commercial paper and other plutocrat request instruments.
Still, these mutual finances aren’t risk free. They carry pitfalls similar as interest rate threat and credit threat. Therefore, investors should study
#7. Commercial Real Estate
Commercial real estate provides capital appreciation and rental income. The higher appreciation is due to demand for office space with the growth of corporate environment.
A good investment in office and shop spaces not only fetches higher returns but also helps in diversification of investment assets.
But the real estate location, building quality, market space rent and the demand-supply plays a major factor in deciding returns.
Commercial real estate includes several categories, such as retailers of all kinds—office space, hotels and resorts, strip malls, restaurants, and healthcare facilities.
#8. Initial Public Offer (IPO)
The best part of investing in IPO is that the money gets blocked only for 7 to 15 days. Prudent investment in a good company coming out with IPO can fetch returns as high as 20-25% over a period of time.
What Is an Initial Public Offering (IPO)?
When a private company first sells shares of stock to the public, this process is known as an initial public offering (IPO). In essence, an IPO means that a company’s ownership is transitioning from private ownership to public ownership. For that reason, the IPO process is sometimes referred to as “going public.” An IPO allows a company to raise capital from public investors.
Startup companies or companies that have been in business for decades can decide to go public through an IPO. Companies typically issue an IPO to raise capital to pay off debts, fund growth initiatives, raise their public profile, or to allow company insiders to diversify their holdings or create liquidity by selling all or a portion of their private shares as part of the IPO.
#9. Fixed Deposit
Returns on a 3-year FD vary from bank to bank, usually in a range of 5% to 6.5%. Also there are no associated tax benefits in this investment option.
- FD is a low risk financial instrument with fixed rate of interest – higher than savings account
- Returns on FD are not dependent on equity market or economy performance. Once booked you are rest assured of committed returns
- You can save on taxes by investing in tax saver FD