Written by
Kriti Arora
Insurance Writer
Kriti is a content marketing and branding expert with more than 13 years of rich experience across BFSI and Telecom industries. She is currently leading Digital Creative Strategy for Axis Max Life insurance.
Reviewed by
Bhaskar Sinha
Insurance Expert
8+ years of experience in Life Insurance with expertise in Developing Life and Health Products, Digital Sales, Conducting effective trainings and Key Account Management.
Investment Plans are essentially financial instruments that help create sustainable wealth for the future. Various investment plans in India enable us to invest our savings into different money-market products in a disciplined and periodic manner to achieve our financial goals.
Overall, investment plans provide the much-needed advantage of maximizing our savings through systematic, long-term investments and create wealth for the future. The first step towards having the investment plan in India is to assess your risk profile and financial needs, and then choose an investment plan that aligns with your needs.
Currently, prospective investors in India are spoilt for choice if they decide to seek out investment plans that suit their unique financial needs. Below is a list of 30 popular investment options in India along with their tax benefits, wherever applicable:
Here is how you can choose the right investment plans from the best investment options in India:
Risk and return are two important concepts to consider when evaluating investment plans. Risk refers to the potential for loss of capital, while return is the gain or loss on an investment over a period. In general, investment plans with higher potential returns also carry a higher level of risk. For example, stocks tend to have a higher potential return than bonds, but they also tend to be more volatile and therefore carry a higher level of risk. It is important to understand your risk tolerance and consider both the potential return and the potential risk of an investment before deciding.
If you prefer short-term investments, a locking period of even 3 years can seem like a long time. However, there are many investment plans of 12 months that can also help you steer clear of market risks. Here are some prime investment schemes for short-term you can consider:
A common variation of short-term investment plans is 3-year investment schemes, and these are best suited for those who want high returns in a short span of time. Here are a few options you can take into account:
Although 5 years is a long time, a 5-year investment plan in India is typically considered as a short-term investment with low market risks. However, the returns of a 5-year investment scheme are much higher compared to other short-term investments. So, here are some options you can evaluate:
An investment that is held for a period of 5 years or longer is termed as a long-term investment. Staying invested longer ensures that investors get the most from the power of compounding. Some financial goals that require long-term investments include retirement, children’s education expenses, purchase of property, etc. Some long-term investment options to consider include:
Investment plans such as ULIPS, online savings plans, and Equity Linked Savings Schemes (ELSS) provide opportunities for wealth accumulation through market-linked returns. At the same time, these investment plans also offer significant tax saving benefits4 under Section 80C of the Indian Tax Act 1961. Under these two sections, both the premiums payable and the insurance payouts are tax-deductible, and Tax exempted, respectively.
While choosing between the best investment plans with high returns, considering the risk associated with these investment plans is crucial. For investment plans, their risk can be depicted as the possibility or probability of the asset either performing below-expectation or experiencing a permanent loss of value.
Based on the associated risk, thus, different investment plans are broadly classNameified into three categories, as depicted below:
As the name suggests, low-risk investment plans are those in which the element of risk is approximately zero. In other words, low-risk investment plans tend to provide stable and reliable, growth of value, but minimal losses. Given below is the list of top investment options that can be taken into consideration.
Sukanya Samriddhi Account is gaining popularity as one of the best investment plans in India for the girl child. If you have a girl child, this Yojana aims to facilitate corpus creation for the girl child. You can open a Sukanya Samriddhi Yojana account at both commercial banks and post offices. Furthermore, you can avail of significant tax savings4 under Section 80C of the Income Tax Act 1961.
Public Provident Fund (PPF) is one of the best investment options in India, considering the array of benefits it provides. If you are a salaried individual, PPF can offer many advantages. While the interest income on PPF is not taxable, you can also avail of tax deductions under Section 80C of the income tax 1961.
Generally regarded as one of the best plans for investment, post office monthly income scheme is most suitable for-risk-averse individuals who are looking for low-risk investment plans with decent returns. Here, you must understand that while the income from post office monthly income schemes is fully taxable, the monthly income plans do not attract Tax Deduction at Source (TDS.)
An undertaking of the Indian government, a senior citizen scheme that enables savings – SCSS, is widely regarded as one of the best investment options in India for a variety of reasons.
First, the scheme offers significant financial security for senior citizens. Secondly, the interest rate for this scheme is decided by the government every quarter. You can open an SCSS account at post offices and any nationalised banks.
Tax saving fixed deposits (FDs) are considered by many as one of the best investment scheme and investment plans in India because it provides significant tax savings4 benefits under Section 80C and can help you lower your overall tax liability.
Sovereign Gold Bonds (or SGBs) are issued by the Reserve Bank of India and backed by the Indian government. Essentially, SGBs are securities that serve as an alternative to holding physical gold and are denominated in units of gold (grams). At the time of maturity, you can redeem these bonds in cash, which makes SGBs, one of the best investment options in India.
Savings and Income plans and protection plans are two categories of life insurance that come under the low risk category. There is no identifiable investment component in such life insurance plans, i.e. these insurance plans do not offer market-linked returns. Instead, these life insurance plans serve as a robust financial safety net for your family and efficient protection against life’s uncertainties.
Bonds are certificates of your lending money to the issuer at the said interest rate. The interest on each bond could be paid to you regularly, and in the end, the face value is returned. Alternatively, you can also sell the bond before expiry if you need it. Bonds are regarded as one of the best investment options in India because of their relative safety.
As the name suggests, high-risk investment plans are suitable for investors whose primary focus is on having long-term capital growth. Meanwhile, most high-risk investment plans tend to incur substantial fluctuations but provide opportunities to create significant possible returns in the long-term. Examples of high-risk investment plans include:
Equities offer risk-taking investors the chance to achieve their financial goals. While every asset is essential in its peculiar way, equities have a proven track record over the long-term, vis-à-vis other assets. In an equity investment, thus, you can buy a share of the ownership in a company, which entitles the investor to the gains and losses of the business.
ULIPs or unit-linked insurance plans are generally regarded as one of the best investment options in India because they offer both life insurance and investment returns benefits. Not just this, they also offer you option to move your money between high risk, medium and low risk. This is so because it allows you to invest your money in a mix of various fund options. While part of the premium amount is allocated to a variety of fund options (based on your investment objectives and risk profile), the remaining portion is used to provide the much-needed insurance coverage.
Overall, ULIPs are essentially life insurance plans that offer an additional feature of investing your money in different money-market linked assets based on your goals. Thus, ULIPs are another route to invest in a professionally managed portfolio of equities or bonds. The benefit of investing in a bond fund through ULIP is that as per the prevailing tax laws, you may enjoy tax deduction under section 80C subject to fulfilling conditions therein.
ULIPs offer a clear classNameification of risk categories, where you can pick up the higher risk fund for the long-term goals. You can gradually shift to lower-risk investments as your investment nears maturity.
A mutual fund is formed when money is collected from different investors and invested in a company’s stocks or bonds. Typically, a mutual fund is shared by thousands of investors and is managed collectively to earn the highest possible returns. The person driving the mutual fund is a professional fund manager.
Mutual funds offer diversified investment with lower investment corpus in any or multiple asset classNamees. For example, you can invest in a pure equity fund, a debt fund or a hybrid fund investing in both stocks and bonds.
Mutual funds may offer various risk category funds based on the type of stocks or bonds they are investing into. Index funds are considered the safest fund category among equity funds, whereas Gilt funds are the safest bet among the debt categories.
As the name suggests, medium or moderate risk investments comprise investment plans that serve as diversified or balanced investments. Investment plans with a moderate risk profile provide not only the potential for growth but also willingness to accept a certain level of market volatility. Most medium risk investment plans help diversify your investment portfolio through a mix of equity and debt instruments to generate stable returns without taking any huge risks. Examples of medium risk investment plans include:
Every one of us has a set of goals that we strive to achieve in our lifetime. In today’s day and age, however, we cannot rely on our savings only.It is through investment plans that we can create a robust financial portfolio to realise these goals.
To fulfil your goals of affording a home or securing your retirement financially, it is crucial that you identify the best investment plan that will help you grow your money over time. Therefore, you need to have a goal and a tentative timeline to achieve in mind before you start investing in any of the best investment plans with high returns. Remember, once you have a goal in sight, you need to start investing as soon as possible – doing so will help you streamline the process.
If you are a salaried or self-employed individual, you must remember that you cannot achieve your goals with only your savings – you need to maximize your savings and create wealth through investment plans. To build wealth, you must invest your money in some of the best investment options with high returns.
If you do not invest, the chances are that you will miss out on opportunities to maximize your financial worth and wealth-building potential. While you have the risk of losing money through investment plans, you have a much higher potential to gain significantly – provided you invest wisely and on time.
To purchase the insurance + investment plans in India, you need to produce the following documents as proof for KYC verification:
1. Officially Valid Documents (Any of these)
• Passport
• Voter’s ID
• Job card issued by NREGA duly signed by an officer of the State Government
• Aadhaar Card
• National Population Register containing details of name, address and Aadhaar number
• Or any other document as notified by the Central Government
2. In addition to the Officially Valid Documents
• PAN Card/Form 60
3. In case Officially Valid Documents does not contain updated address
• Utility Bill (Not more than two months old) of any service provider (electricity, telephone, postpaid mobile connection, piped gas, water)
• Property or Municipal Tax Receipt
• Pension or family pension payment orders (PPOs) issued to retired
• Employees by Government Department or PSUs, if they contain the address
• Letter of allotment of accommodation from employer issued by State or Central Government departments, statutory or regulatory bodies, PSUs, scheduled commercial banks, financial institutions and listed companies
For Salaried Individuals (Any one)
• Bank statement showing salary credit for latest 3 months
• Latest 2 years Income Tax Returns
• Latest year Form 16
For Self Employed (Any one)
• Latest 2 years Income tax returns not filed in same year along with Computation of income
• If computation of income not available: Latest 3 years Income tax returns not filed in same year
• CA certified Audited balance sheet and profit loss account for latest 2 years
• Form 26 AS
ARN NO: PCP/IP/050623
“I have taken Monthly Income advantage plan , ULIP Fast track Super plan and Smart Wealth plan from Axis Max Life Insurance Company ....from which my family is safe and Secure..”
Manisha Deep Andola
“I have invested in Axis Max life cancer plan and Axis Max life savings advantage plan. Both these plans are keeping me secured from illness and financial security”
Archana
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