A number of investment avenues in India depend on the size of investment and financial objectives. These avenues of investments should be wisely selected by an investor as we all know that saving and investing are the sole pillars of financial stability.

Mr. Warren Buffet who is the world’s most successful investor says never depend on a single income, invest to create the second source. Creating multiple sources of investment avenues is very essential to achieve your financial goals. So, broadly, saving is done to meet your emergency expenses or unplanned expenses while investment is all about making your money earn for you and give you the rewards through future returns.

In our article today, we will try to list the different types of investment avenues in India where investors can put in their money.

1. Savings Bank Account & Flexi Deposits

Holding Period: Short Term

Risk Involved: Low

You must be surprised to find the savings bank account in this list. Well, strengthening your saving bank account is the first investment you can do. Bank accounts earn an interest of 3.5% or more which differs from bank to bank. You can convert your savings account with a balance of above 25,000 to the Flexi deposit account, which is highly liquid and earns you the interest of an FD. Maintain a savings account for your short-term expenses and emergencies. So bank saving account is one of the various investment avenues in India.

2. Bank Fixed Deposits:

Holding Period: Short/Mid Term

Risk Involved: Low

Bank FD’s have attracted the maximum investment, primarily because it is a safe source of investment where the rate of returns is fixed. Fixed Deposit has been considered as best investment options in India as it allows premature withdrawal with an interest deduction making them a liquid investment.

However, you cannot break a tax saving FD that is locked in for 5 years. Before investing, compare the FD charts of various nationalized banks and invest in those which offer the highest interest rate. Also, don’t forget to fill 15 G/H to avoid deduction of TDS (Tax deducted at source) on interest earned.

3. Mutual Funds:

Holding Period: Short/Long Term

Risk Involved: Depends on the fund bought

You all must have seen the ad “Mutual Fund Sahi hai” beaming from our TV screens. Mutual funds (MF) have grown as a lucrative investment, both for the short term (money market funds) or the long-term (tax saving or equity mutual funds). You can invest in MF’s through SIP’s (Systematic Investment Plans) or in a lump sum as a single investment with (Systematic transfer plans). Mutual funds are gaining popularity day by day and making it to the top of the list of top investment avenues in India due to the inflation beating returns they offer.

Systematic Investment Plan and Systematic Transfer Plan should be done in the accumulation phase and then the one can withdraw money using a Systematic withdrawal plan. The risk profile depends on the funds you invest in, while debt funds invite less risk, the risk is comparatively higher in equity funds. 

4. Post Office Savings Scheme:

Holding Period: Long Term

Risk Involved: Low

Post Office savings scheme offers a safer investment option, offering monthly income plans which are apt for the retired person meeting their medical and other requirements. However, it is a traditional way of investment which should be now considered as saving avenue rather than an investment option.

5. Public Provident Fund

Holding Period: Long Term

Risk Involved: Low

Public Provident Fund (PPF) scheme is a long term investment option that offers an attractive rate of interest and returns on the amount invested. This is one of the most favorite avenues of most of the Indians. The interest earned and the returns are not taxable under Income Tax. One has to open a PPF account under this scheme and the amount deposited during a year will be claimed under section 80C deductions.

PPF has a lock-in of 15 years which enables you to earn compound interest on your investments. If you want to extend your investment time frame, you can extend it for the next five years. The minimum period of investments is 6 years after which you can withdraw your investments. In case of financial emergencies, you can take a loan on the balance of your PPF account.

6. Gold Investment

Holding Period: Long Term

Risk Involved: Medium

Investment in Gold is one of the most sought out investment options exercised since older times. The value of gold bears an inverse relation with the value of equity. You can plan your investment in gold through a Gold deposit scheme, Gold ETF (exchange-traded fund), Gold mutual funds, Gold bar, etc.

Gold mutual funds and ETFs allow you to hold the gold in a paperless form and sell them in stock exchanges making them a highly liquid investment. However, at an individual or the level of entire economies, gold is a dead investment that does not produce anything. In fact, for India, as has often been pointed out, our huge appetite for gold is especially harmful.

7. Real Estate

Holding Period: Long Term

Risk Involved: Medium

Every investor has some part of their portfolio invested in real assets. The location of the property is the single most important factor that will determine the value of your property and also the rental that it can earn. Investments in real estate deliver returns in two ways – capital appreciation and rentals. However, unlike other asset classes, real estate is highly illiquid. The other big risk is with getting the necessary regulatory approvals, which has largely been addressed after coming of the real estate regulator.

You must be surprised by not seeing insurance in above list. We believe that insurance is a pure protection product. One must have a term insurance and health insurance but considering insurance as an investment material is misconception.

There are even more investment avenues in India which you can check on Cashoverflow. But we have enlisted most popular and best investment avenues in India out of wide range of options.

Why Chitale CFS Pvt Ltd?

Chitale CFS Pvt Ltd offers wide variety of investment avenues for short as well as long term investment needs. With more than 30+ years of experience, we are one stop solution for a number of financial products like Mutual Funds, Insurance, Bonds, Fixed Deposits etc. We serve our clients with highest standard of transparency and integrity by putting investor’s interest first.

You can contact us by calling on +91 9890045553 or email us at [email protected] or [email protected]

Mutual fund investments are subject to market risks. Please read the offer document carefully before investing

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Mutual fund investment is subject to market risk, read scheme related document carefully before investing.