Investing is a powerful tool that allows your money to grow over time. However, it can be overwhelming to choose the best investment plan that suits your needs and goals. There are various options available, from stocks, bonds, and mutual funds to real estate investments, each with its own pros and cons.
Whether you are just starting to invest or a seasoned investor, it’s crucial to understand the risks and potential rewards of each investment plan. No matter your age or income level, investing can be a great way to secure a prosperous future.
By selecting the right investment plan, you can create a financial roadmap that leads to long-term wealth growth. We will help you explore the best investment plans to maximize your returns while minimizing risks.
Table of Contents
Types of investment plans for long-term wealth growth
Although there are multiple investment options in India but best investment plan is further categorised based on your risk appetite.
- Best Investment Plan for Risk- Averse Investor ( Low-Risk Investment )
- Best Investment Plan for Moderate Investor (Medium-Risk Investment )
- Best Investment Plan for Aggressive Investors (High-Risk Investment )
Low-Risk Investment
Low-risk investments are suitable for investors who want safe and secure returns in the short or long term.
Here, is the list of some Low-Risk Investment for risk-averse investors:
Bank/ Post Office Fixed Deposit
Bank or Post Office Fixed Deposit are one of the best investment option. FDs are safe and secure. One can start a FD for various durations that may range from a few days to years altogether.
This hassle-free investment is free from market fluctuations and away from market noise.
FDs gives you better returns than your savings bank account.
Post Office 1 year fixed deposit is the best investment plan for 1 year in Post Office.
Check latest Post Office FD rates
Post office FD rates 2024
Post office FD rates 2024
Post Office Saving Schemes
There are more than 12 Post Office schemes to choose from.
Post Office saving schemes include savings such as Post office Time Deposit ( FD ) 1/2/3/5 year, Post Office Recurring Deposit, National Saving Certificate, POMIS, PPF, SCSS, Kisan Vikas Patra, Sukanya Samridhi Yojana, Manila Saving Samaan Yojana and more.
All these saving schemes are safe as backed by Govt. of India.
Explore the post Post Office Saving Scheme- Unlocking The Benefits
Money market funds
Money market funds are a category of short-term mutual funds. This fund belongs to a short-term debt fund having a maturity of 1 year.
Municipal Bonds
Municipal Bonds are the bonds issued by Municipal corporations or similar entities to raise funds.
These bonds are issued for money raising to meet the requirements such as building bridges, social causes, schools or hospitals or such similar causes.
Certificate of Deposits
Certificate of Deposits are the term deposits offered by scheduled commercial banks. The CDs can’t be premature redemption/exit is not allowed in CDs.
Additionally, CDs are freely negotiable.
Treasury Bills
The Government of India issues Treasury bills to raise funds. Tbills maximum maturity time is 365 days. But return is comparitively lower than the money market funds.
RBI Floating rate Bonds
These floating rate bonds provide half-yearly coupon/interest to the bearer. Floating-rate bonds are issued for 7 year duration.
Sovereign Gold Bonds
SGB is another format to hold Gold in paper format. Probably it is the best option to invest in since these bonds also give 2.5% annual interest apart from increment in Gold Prices.
Sovereign Gold Bond Scheme 2024 Series 4- Should You Invest?
Medium-Risk Investment
Hybrid Debt Funds/ Conservative Hybrid Fund
Hybrid Debt Funds or debt-oriented hybrid funds are a combination of equity and debt. Hybrid debt funds invest more than 65% of assets in debt securities and rest money in equity asset class.
This combination makes them less riskier than equity-oriented hybrid funds or equity funds. These funds give better returns than debt funds.
Arbitrage Funds
Arbitrage funds seek profit on price differentials between derivative and cash market buy taking simultaneous buy and sell positions. Thus taking riskless profit from the price difference in two markets.
Multi-Asset Funds
A multi-asset fund is a combination of asset classes (such as equity, debt or commodities) used as an investment. A multi-asset class investment contains more than two asset classes, therefore creating a portfolio of assets.
The result is lower risk as compared to other funds.
Equity savings Funds
Equity savings Funds are a combination of Equity and equity-related instruments (min.65%), debt instruments (min.10%) and derivatives (min. for hedging to be specified in the SID).
Debt Funds
A debt fund (also known as an income fund) is a fund that invests primarily in bonds or other debt securities.
Debt funds invest in short and long-term securities issued by the government, public financial institutions, companies – Treasury bills, Government Securities, Debentures, Commercial paper, Certificates of Deposit and others.
High Risk Investment
High Risk investment generally refers to investments that offer high returns but are riskier. Returns are not guranteed and one can see loss/gain in short or long time.
Direct Equity/ Stocks
Direct Equity or direct ownership of the company. Highly risky and highly rewarding investment since you become part owner of profit and loss. This kind of investing may hold good for long-term investing.
Equity Mutual Fund
An equity Scheme is a fund that primarily invests in equities and equity-related instruments. Equity Mf seeks long-term growth but could be volatile in the short term.
Equity Mutual Funds are suitable for investors with higher risk appetite and longer investment horizons.
Forex trading
Forex or Foreign exchange trading refers to network of buyers and sellers who exchanges currencies on agreed upon prices.
Hedge Funds
Hedge funds are actively managed alternative investments that commonly use risky investment strategies. Hedge fund investment requires a high minimum investment. Hedge funds usually target wealthy investors.
Alternate investment
There are two main types- private assets and hedge funds. Private Assets might be private equity, private credit, infrastructure and private real estate. They are more complex and less frequently traded than public stocks and bonds, and give investors access to additional sources of return. Whereas, hedge funds operate mainly in public markets but use less traditional tools such as short-selling and leverage.
Real Estate
Unlike other kinds of investments, real estate investments are big-ticket investments, Usually purchased for long-term for self-use or trading purposes.
Investment strategies for long-term wealth growth
For long-term wealth growth, one can choose to invest in the above-given investment avenues. However, for long-term wealth creation, one can choose to invest in direct equity or equity mutual funds. Few tips to get the best output from your money.
- Buy an investment if it truly matches with your goal -understand the investment before investing
- Diversify your investments across various asset class
- Do not try to time the market – rather keep investing
- Invest for long term.
- Start early
- Choose products that have a low tax impact.
- Start Investing.
- Keep increasing your investments with time
- Get rid of laggards in your Portfolio.
Choosing the right investment plan for your financial goals
The Choice of the Right Investment Plan is difficult but with the best Investment Planning you can certainly choose the best one for you.
Here are the quick tips to start your investing journey.
- Define Your Financial Future commitments – Set SMART Financial Goals
- Categorise them into Short, Mid or Long term Goals
- Analyse how much risk you can take with your investment.
- Choose investments based on investment duration matching with your goal duration and risk profile.
Conclusion:
Taking the first steps towards long-term financial success.
You can always work with a Certified Financial planner and plan your finances, including Emergency funding, building a corpus for house purchase, and taking care of your health needs so that you can plan a better retirement income in your second inning, leading to a more secure and financially stable retirement.
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