Last Updated on Dec 12, 2024 by Vanessa Sequeira
With the uncertainty the world has faced in the past few years, you may wonder, ‘Where to invest money in India?’ Well, investors are increasingly turning towards long-term investment options. These options can help you build wealth, hedge yourself against inflation, and take advantage of potential tax benefits. Here are the ten popular and best investment ideas on where you can invest money in India:
- Stocks
- Mutual funds
- ETFs
- Fixed deposits
- Gold
- Real estate
- Bonds
- Saving schemes
- SIP mutual funds
- ULIPs
- REITs
- National Savings Scheme (NSC)
- Post Office Time Deposit
- Kisan Vikas Patra (KVP)
In this article, let’s understand each investment option and learn how to find the best investment option for your portfolio.
Table of Contents
What is Investment?
To put it simply, investment is the process of putting your money into assets like stocks, bonds, real estate, or mutual funds with the aim of earning returns or growing your wealth over time. It involves committing capital today in hopes of generating income or profit in the future, often influenced by factors like risk, time horizon, and market conditions. Exploring different investment options, such as the safest investment options in India or the best investment scheme for senior citizens, can be crucial to achieving your goals.
How an Investment Works?
Investing is an essential step towards building your financial future and achieving your long-term goals. However, understanding how investments work can often feel overwhelming. Whether you are exploring top investment options in India or wondering about the best investment plan for 3 years, knowing the basics of how investments operate can help you make better decisions. Let’s walk through how investments work step by step.
- Research and Selection: The first step is research. You’ll need to gather information about potential investments, such as the 10 best shares to buy today for the long term or the best investment options in India. This research helps you identify investments that match your financial goals, whether you’re aiming for growth, income, or stability.
- Making the Investment Decision: Once you have done your research, you will make your investment decision. You might decide to go with top 10 ETF funds in India if you’re seeking diversification or choose the best stocks to buy today in India for short-term gains if you’re looking for quicker returns. For those seeking stability, considering the safest investment options in India or the best investment scheme for senior citizens could be worthwhile.
- Executing the Investment: After making a decision, you execute the investment by purchasing the chosen asset, such as stocks, mutual funds, or bonds. If you opt for a one-time investment plan, you will make a lump sum payment into the selected option. This is an important step in beginning your journey to invest your money effectively and ensuring it works toward achieving your objectives.
- Monitoring and Adjusting: Investing doesn’t end with buying; it’s important to keep an eye on your investments to ensure they are performing as expected. This ongoing process may involve rebalancing your portfolio, especially if market conditions change or your financial goals evolve. Whether you’re targeting good returns or aiming for safer bets, monitoring helps keep your investments aligned with your objectives. Using effective investment tools for tracking performance can simplify this process.
Types of investments in India
There are different types of investment options based on multiple factors. Let’s have a look at the different kinds of investment avenues.
Based on Risk
In general, the higher the potential return, the higher the risk involved. For example, high return stocks may offer great upside potential but can also be highly volatile. On the flip side, safe investments with high returns in India might offer more predictable earnings but at a lower growth rate. Balancing risk and return is crucial to ensure that your investment strategy matches your comfort level and financial goals.
- Low-risk investments in India
Low-risk investments prioritise capital preservation and stability, appealing to individuals with low risk tolerance like retirees. Common options include Fixed Deposits (FDs), Savings Accounts, and Government Bonds, offering secure principal protection and guaranteed returns. These are suitable for those looking for savings and investment options with minimal risks.
- Medium-risk investments in India
Medium-risk investments balance potential returns and moderate volatility, ideal for longer long-term investment horizons. Options include Mutual Funds, National Pension System (NPS), and Real Estate, blending stability and growth. These provide an opportunity to invest your money in options that grow steadily over time.
- High-risk investments in India
High-risk investments offer high returns but come with significant volatility. Suitable for those with a higher risk appetite and long-term goals, options include stocks, equity mutual funds, and cryptocurrencies. These investments require active management due to price fluctuations and are an exciting category of investing options for risk-tolerant individuals.
Based on the Need and Purpose of the Investments
- Growth investment plans
Growth Investment Plans are aim to deliver substantial returns by investing in assets with growth potential. Examples include stocks of companies with high growth prospects or sectors expected to outperform, equity mutual funds, innovation funds, individual growth stocks, etc. Growth Investment Plans typically carry higher risks but are attractive investment tools for achieving higher growth over the long term.
- Safe investment plans
Prioritising capital preservation and modest returns, these plans are low-risk and suitable for conservative investors. Examples include fixed deposits, government bonds, and savings accounts. These investment avenues focus on security while providing stable returns.
- Income investment plans
Income Investment Plans focus on generating a steady stream of income. These best money investment plans suit investors looking for regular cash flow and are less concerned about capital appreciation. Examples include corporate bonds, dividend stocks, and REITs. These are ideal for balancing savings and investment goals.
They are suitable for investors seeking a balance between income generation and capital preservation.
Where to Invest Money in India?
Here are 15 best places to invest money in India for good returns:
1. Stocks
Stocks represent ownership shares in a company, allowing investors to earn returns through price appreciation and dividends based on the company’s performance. Proper market research and understanding are crucial before investing. There are different types of stocks, like growth stocks, value stocks, etc, and some of them are a great choice for long-term investment. You can use Tickertape’s Stock Screener to find the best stocks in India invest in share market. With Tickertape’s 200+ filters, you can quickly and easily narrow down your search to find stocks that meet your specific criteria.
2. Mutual funds
Mutual funds pool money to invest in assets like equities and bonds, managed by a fund manager. They offer diversification and suit both short-term and long-term goals. There are different types of mutual funds: debt, growth, hybrid and more. Tickertape’s Mutual Fund Screener helps filter funds by key metrics such as AUM, NAV, and returns. Learn more about how to use the Tickertape Screener to select and invest in mutual funds.
One of the key benefits of investment is that you can avail a loan against mutual funds. To understand how to find the best mutual funds and ways to invest in mutual funds, read this article.
3. ETFs
Exchange-Traded Funds (ETFs) combine diversification like mutual funds with the tradability of stocks. They are cost-effective and suit varied goals, offering options like equity, debt, and gold ETFs. Tickertape’s Stock Screener simplifies finding ETFs using metrics like expense ratio and returns. ETFs provide flexibility and liquidity, making them a versatile choice for India investments.
Check out guides on the Top 10 ETF Funds in India, Exchange-Traded Funds, Best Gold ETFs in India, and ETFs vs. Mutual Funds to learn more about where to invest money to get good returns.
4. Fixed deposits
This is one of India’s traditional and popular investment options. Fixed deposits (FDs) are among the first choices when thinking about ‘where to invest my money in India’. The reason behind its popularity is the minimal risk profile with decent returns.
Fixed deposits are offered by banks, post offices and Non-Banking Financial Companies (NBFCs). They are suited for your lump-sum investment to grow and also offer interest at regular intervals. The interest rate on FDs varies with the bank or the NBFC. You can even leverage your India investment in fixed deposits by availing of a loan against them. Read more about it here.
4. Gold
Gold is a traditional low-risk investment, valued for its inflation hedge and cultural significance. Options now include digital gold, ETFs, and gold mutual funds. Tools like Tickertape enable easy digital gold investments, with tracking features for portfolio management. If you are wondering if digital gold is a good investment and understand how to invest in gold, check out some of our guides on Tickertape.
If you’re wondering about the benefits of investment in digital gold, you may also like to read 5 Reasons to Invest in Digital Gold.
5. Real estate
Investing in real estate is a popular choice when considering where to invest my money for substantial returns. Though it involves a good amount of investment, its returns are huge. You can get returns either when you sell it or monthly in the form of rent. But while buying or selling, ensure to consider all the related charges like registration fees, property taxes, and more. It can be considered a good investment option for the long-term horizon.
6. Bonds
Companies and governments offer bonds to raise funds, making them a stable choice for India investments. To raise funds for their company, they offer bonds. You can buy those bonds for a fixed interest and tenure. It is considered a low-risk investment option in India, especially when it is government-backed, offering a reliable option for those exploring where to invest money in India with low risks. Learn more about bonds here.
7. Saving schemes
As the name suggests, saving schemes help you save your monthly income for a period of time, which turns into a big corpus. These are backed by the government, banks or financial institutions. The savings scheme has a lock-in period and encourages you to save regularly. They are considered low-risk, long-term investment options that don’t require a lump-sum investment.
Employee Provident Fund (EPF), National Pension Scheme (NPS), National Savings Certificate (NSC), Post Office Savings Account, Senior Citizen Savings Scheme (SCSS), etc. are a few popular savings schemes in India.
8. SIP mutual funds
Well, you know about mutual funds, but did you know that all mutual funds don’t require a lump-sum investment amount? Yes. Systematic Investment Plan (SIP) is a type of mutual fund which doesn’t require lump-sum investment. The investment in SIP starts at Rs. 100 and allows investment at regular intervals. So, if you are interested in investing in mutual funds but are worried about lump-sum investment, SIP can be your go-to option.
Through SIP, you can invest monthly in a disciplined manner and avail yourself of the benefit of compound interest. You can visit Tickertape to explore the list of SIP mutual funds and identify the best way to invest money in India. Go to Mutual Fund Screener and search for ‘SIP Investment’ in ‘Add Filters’. Find the list of SIP mutual funds in India and sort them according to your preferred parameters like AUM, NAV, 1-yr returns, etc.
9. ULIPs
Unit Linked Insurance Plans (ULIPs) are provided by insurance companies. Here, a portion of the investment is invested in stocks or bonds, while the remaining is invested in life insurance. They are suitable for those seeking financial protection alongside returns, making them a unique India investment option.
Overall, it invests in equity and debt markets while simultaneously offering protection to the investor. It covers returns, protection and tax-saving as well. However, as it involves equity, there is a certain risk involved. Learn about them here, along with everything you need to know about ULIPs and the five best ULIP plans to secure your future.
10. REITs
Real Estate Investment Trust (REIT) is an investment option similar to mutual funds where investors pool in investment and REIT companies manage the investment. They invest the funds in primary real estate buildings and mortgages. They generate money from the rental income, and the investors will get a portion of the returns in the form of dividends. Learn more about this investment here.
12. National Savings Scheme (NSC)
NSC is a government-backed, low-risk savings scheme offering fixed returns and tax benefits under Section 80C. Easily accessible via post offices, NSC suits risk-averse investors seeking secure and stable investment options with competitive interest rates.
13. Post Office Time Deposit
POTD offers fixed returns with flexible tenures (1–5 years) and Section 80C tax benefits for the 5-year plan. It is a secure, government-backed investment with predictable returns, ideal for conservative investors prioritising stability.
14. Kisan Vikas Patra (KVP)
KVP is a low-risk, government-backed scheme where investments double over a set period (around 10 years). Available at post offices, it suits conservative investors seeking guaranteed, long-term returns with a straightforward structure.
How to Invest in India?
Apart from the ones discussed above, there are various other ways to invest money in India as well. The risk profile of each investment is different, and no investment suits all your investment needs. Hence, you need to understand each investment option carefully and pick the ones that suit your objective. If you’re wondering which is the best way to invest money, consider creating a diversified portfolio to mitigate risk. Even if one investment is not doing well, the profit on the other ones should be able to compensate, making it one of the best ways to invest money effectively. To check if your portfolio is well-diversified, connect it with Tickertape.
Tickertape’s Diversification Score is a powerful tool that provides insights into their portfolios and helps them make informed and profitable investment decisions. The Diversification Score ranges from 1 to 100, and the higher the score, the closer the portfolio is to being perfectly diversified and less volatile. If the score is too low, you can further diversify your portfolio by adding stocks from other sectors or market caps. Proper diversification can help you achieve better risk-adjusted returns and protect against market volatility. It sure helps to mitigate red flags, too! So, what are you waiting for? Connect your portfolio now!
Factors for Choosing the Right Investment Plan
When considering ways to invest money in India and selecting the best assets to invest in India, you should think about the following factors:
- Financial goals: Figure out what you want to do with your money. It can be buying things, saving for your kids’ education or weddings, getting a home, or planning for when you stop working. The best assets to buy in India should align with these financial objectives.
- Risk tolerance: Decide how comfortable you are with taking risks. If you’re okay with more risk, select investments from the list of high-risk. If you want less risk, you might go for plans backed by the government or those offering higher security. Talking to an expert while charting out investments based on risks is always worthwhile. This step is vital when deciding where can I invest my money to balance risk and return effectively.
- Performance: It may be one of the key factors when choosing the investment for your portfolio. Checking how well an investment has done in the past can give you an insight into their earnings and how they work. It will help you set the right expectations and pick the highest return investment for your portfolio, among many other options. For example, if you’re thinking about mutual funds, see how much money they’ve made before and compare that to other choices.
- Lock-in period: Some investments lock your money in for a specific time. For instance, ELSS funds make you wait for 3-yrs before you can take out your money. Choose an investment option with a lock-in period that suits your needs when considering which is best way to invest money for your goals.
- Expense related to investment: It is always worthwhile to know about the costs connected to your investment. For example, mutual funds come with an expense ratio and an exit load. Knowing these expenses in advance will give you a clearer picture of your net returns, ensuring you choose which is the best way to invest money while minimising costs.
- Market conditions and trends: Keep an eye on what’s happening in the market. For example, when things are uncertain, gold prices usually go up because people see it as a safe place for their money. By thinking about these things based on what you need, you can choose the best investment plan for you.
Conclusion
Finding the right investment option that suits you may not be an easy task, but once you understand how it works, you’ll be able to make wise decisions and help your wealth grow. If you are new to the investment world, try learning the concepts. Make use of the Blog by Tickertape that explains investment concepts in simple terms and provides expert opinions. And there are financial advisors to help you with investment choices.
Frequently Asked Questions (FAQs) on Where to Invest Money in India
1. Which investment gives highest returns?
There are investment options like stocks and mutual funds that offer high returns, but they are also considered highly risky. Therefore, consider your investment objective and risk appetite to determine what the best saving options are for you.
2. Which is the best investment plan in India for monthly income?
Investments like real estate, provident funds, fixed deposits, etc., offer monthly income. The monthly income depends on the scheme you pick.
3. What are the investment options available with low risk?
Fixed deposits and provident funds are considered low-risk investments compared to other investment options.
4. What are the best stocks to invest in?
There are 7000+ companies listed on the Indian stock exchanges. The best ones can be picked based on different parameters like market cap, net profit, 5 yr CAGR, annual returns, and more. Use Tickertape Stock Screener to filter the best stocks in India. There are 200+ filters that can help you understand the performance of a stock better.
5. Where should I invest my money in India?
The top 10 investment options in India are Stocks, Mutual funds, Fixed deposits, Gold, Real estate, Bonds, Saving schemes, SIP mutual funds, ULIPs, and REITs.
6. How to invest money with a low budget in India?
You can start by exploring low-cost investment options like SIPs (Systematic Investment Plans) in mutual funds, government savings schemes, etc. These allow you to invest with a small budget, ensuring diversification and potential growth over time.
7. What is Return on Investment (ROI)?
When you invest, the ultimate goal is usually to earn the best return on investment money. Return on Investment, or ROI, is a simple way to understand how profitable your investment might be. It measures how much money you could make—or lose—compared to the amount you initially invested.
Explore other popular stock collections on Tickertape –
Here’s are some of the popular stock collections across different sectors in India:
As an insatiable reader and learner, I’ve spent the last two years exploring the world of finance. With my creative mind and curious spirit, I love making complex finance topics easy and fun for everyone to understand. Join me on my journey as we navigate the world of finance together!
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