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Top Investment Options In India Offering High Returns

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.

Read More: How Interest On PPF Balance Is Calculated And Some Tips

The interest rate of PPF account of the last 6 years.

Financial Year Interest Rate
2019-2020 7.90%
2018-2019 7.60%
2017-2018 7.60%
2016-2017 8.10%
2015-2016 8.70%
2014-2015 8.70%
2013-2014 8.70%

Real Estate

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.

Read More: Real Estate vs Mutual Fund: Which Is Better Investment Plan?

Gold

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

Tenure Banks FD Rates
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

Bank Tenure FD Rate
Bajaj Finserv 1 year FD 8.00%
Bajaj Finserv 5 year FD 8.35%

ELSS

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?

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