Looking for top investment options in India which will offer you high returns without the risk of losing the principal money? You are at the right place! There are unlimited investment opportunities available in the Indian market. Some are fixed income options and some are market-linked options. It is important to understand both investment options in order to line up with your investment goals.
The fixed income options help to accumulate wealth for the future and market-linked options are exposed to the volatility of the market, they generate a high return on investment. The table below is top investment options in India offering high returns.
Top Investment Options In India Offering High Returns
|Top Investment Option||Risk||Return||Minimum Amount||Maximum Amount||Lock-in Period|
|Public Provident Fund (PPF)||No risk||7.90%||500/- (one FY)||Rs 1.5 lakh per year||15 years|
|Real Estate||Medium-High||Market-linked||No limit||No limit||Can be sold anytime|
|Gold ETF||Low-moderate||Market-linked||Variable||No limit||Can be sold anytime|
|Bank Fixed Deposit||Low||6.50%-8.25%||Variable||No limit||7 days to 10 years|
|Debt Fund||Low-high||Market-Linked||Variable||No limit||Open-end|
|ELSS||High||15%-18%||Rs 500 through SIP||No limit||3 years|
|Direct Equity||High||Market-linked||Decided by the company||No limit||Can be sold anytime|
|RBI Taxable Bonds||No risk||7.75%||Rs 1000||No limit||7 years|
|National Pension System (NPS)||Moderate||10.81%||Rs 100 (Recommended to invest at least Rs 1000 to ensure reasonable pension)||No limit||60 minus entry age|
|Unit Linked Insurance Plans||High||15.3%-9.9% (depends on market performance)||1,00,000 for plans 5 years and below||No limit||5 years|
Public Provident Fund (PPF)
Public Provident Fund comes under long term investment options which are considered as most secured and safest investment options in India. The lock-in period of this fund is 15 years with a return rate of 7.90%. PPF is totally tax-free which makes it to top investment option in India. The principal invested and interest earned is backed by a sovereign guarantee which makes it a safe investment.
The interest rate of PPF account of the last 6 years.
|Financial Year||Interest Rate|
Real estate investment is a popular investment among investors as it fetches high returns in medium to long run. In India, the value of the property increases every 6 months. If you have a fairly good sum to invest in, real estate can be used as a part of your overall wealth-building strategy. Investing in real estate in major cities such as Kolkata, Delhi, Mumbai, Bengaluru, Pune, and Hyderabad, has become an extremely lucrative option. Major sectors like hospitality, manufacturing, commercial, retail are all covered under real estate investment.
Approximate return per year in real estate is 12% and it takes 6 years to double the investment.
Gold is the oldest investment option in India and one get benefit from gold investment in a shorter period of time. There are various gold investment options available in the market such as gold mutual funds, gold bar, and gold deposit scheme which may fetch you high returns. Here are the top 5 Gold ETF schemes with historic returns.
Top 5 Gold ETF (Exchange-Traded Funds) Schemes
|Gold ETF Funds||1 month||3 months||6 months||1 year||3 years||5 years|
|SBI – ETF Gold||-0.40%||-1.90%||21.14%||22.99%||7.93%||6.55%|
|Reliance Gold Savings Fund||-0.2%.||2.2%||19.1%||21.9%||7.7%||6%|
|Aditya Birla Sun Life Gold Fund||0.8%||2.6%||17.8%||23%||6.1%||6.3%|
|Axis Gold Fund||0.5%||3.2%||18.9%||22.1%||6.7%||5.2%|
|Kotak Gold Fund||-1.3%||0.6%||19.6%||22.4%||7.6%||6.1%|
Steps in buying Gold ETF
Step 1: You need to first open an online trading and Demat account with a stockbroker
Step 2: Using your login ID and password, visit the website of the broker’s online trading portal and log in.
Step 3: Select any Gold ETF you want to invest in accordance with your investment objectives
Step 4: After selection, place the buy order for the purchase of a Gold ETF units
Step 5: The amount will be debited from your bank account (Fund transfer will take place through a linked savings account)
Step 6: Gold ETF Units will be credited to your Demat account on trade day + 2nd day
Bank Fixed Deposit
Bank Fixed Deposit falls under the category of the most popular fixed-income investment option in India. As per the bank guidelines, the returns are payable monthly, quarterly, or annually. It helps you in increasing your savings with the benefit of compounding.
Bank Fixed Deposit Interest Rates 2019
|7 years to 10 years||SBI||4.50% – 6.25%|
|1 year to 10 years||PNB Housing Finance||8.05% – 8.45%|
|7 days to 10 years||Axis Bank||3.50% – 6.85%|
|7 days to 10 years||IDFC First Bank||4.00% – 7.50%|
|1 year to 7 years||HDFC||7.72% – 7.72%|
Bank With Highest FD Rate
|Bajaj Finserv||1 year FD||8.00%|
|Bajaj Finserv||5 year FD||8.35%|
Equity Linked Saving Scheme or ELSS is now becoming the most popular investment option for many investors. It is a tax saving mutual fund that comes with a SIP and only mutual fund which qualifies for tax deduction under 80C of Income Tax Act. The approx. return per year in ELSS is 15% to 18% and will take 4-5 years to double the investment.
Various top ELSS tax saving funds are available in the market for FY 2019-20: Best Tax Saving Mutual Fund To Invest
RBI Taxable Bonds
RBI taxable bonds offer an interest rate of 7.75% with a tenure of 7 years issued at a price of Rs 100. The amount is credited to Bond Ledger Account (BLA) of the investor. The transactions take place only through Demat account. The investors get a certificate of holding as proof of the investment. This bond comes with two options: cumulative and non-cumulative. The cumulative option offers the re-invested interest whereas interest can be availed as regular income in the non-cumulative option.
National Pension System (NPS)
Managed by the Pension Fund Regulatory and Development Authority (PFRDA), NPS is a long term retirement-focused investment product. It is a mix of equity, corporate bonds, fixed deposits, government funds and liquid funds, among others. Anyone in the age of 18-60 can invest in NPS, the maximum age can be extended to 70.
According to Section 80C of Income Tax Act 1961, your contributions up to Rs. 1.5 Lac to Tier I capital is exempted. You can claim up to Rs 50,000 tax benefits. Thus, Rs 2 lakh tax saved. Approx. return per year is 8-10%. If you want to double your investment, you have to wait for 7-9 years.
One important thing is required to be noted that an investor cannot withdraw before 65 years of age. An investor can withdraw 60% which is tax-free and the rest 40% is kept to receive a regular pension.
Unit Linked Insurance Plan
An investor gets both insurance and investment option under the Unit Linked Insurance Plan offered by insurance companies under a single integrated plan. If the market performs well, returns could be high. Returns are tax exempted. The con of this investment is that it charges (2% to 4%) lots of fees like premium allocation charge, management charges, mortality charges, administration charges.
Read More: How To Invest In Mutual Funds?