2022 can be a game changer for your finances. Read this article to check the investments with highest returns in India.
Thinking about investments options in India with high returns fills our mind with endless options! Who wouldn’t want to make an investment that gives them high returns without much delay?
Especially in India, investors are very keen on the lookout for different investment plans. Securing your hands on a strategy that involves minimum risk and high returns is the real motto of every new investor.
However, getting high returns on investments is no easy job- it requires the precise strategy mix of a good amount of saving as a backup and smart investment plan.
Along with your ability to take on risk, your financial portfolio will grow gradually or sometimes take a huge leap. The time factor is an important component that must be kept in mind.
You must have seen regular ads of mutual funds starring some of the big celebrities along with the usual tagline that alerts you regarding the risks involved in the market.
Well, mutual funds are definitely one of the most sought-after and perhaps one of the most lucrative investment options in India.
Your investments will always depend on your risk appetite, liquidity requirements, your financial goals and definitely your investment horizon.
There are dozens of investment options available and you can surely find the one that fulfils your desires. If you are a beginner, you must know that risk and returns always go hand-in-hand.
The larger the risk involved, the higher the returns will be. This direct relation of the risk-return decides what investment plan you should opt for.
Any investment option is beneficial as long as it can give you high returns on investments that you make.
In India, the investment options can be broadly classified into two categories: financial assets and non-financial assets. The financial asset class can further be bifurcated into market-linked securities (like mutual funds, live stocks, etc.) and fixed-income products (like bank FDs, PPFs, bank RDs, etc.).
On the other hand, the non-financial asset class includes gold investments, investments in treasury bills, real estate, etc.
On most occasions you will come across two situations- one where the risk seems unbearable but the high returns call you, and another where the risk is barely present but the returns are too shallow and slow.
To help you achieve all your financial goals, let’s take a look at some of the safest investment options with highest returns in India in 2022:
1. Mutual Funds
Mutual funds are one of the most popular investment options in India. It is a type of investment plan that gives you higher returns over long periods of time- patience is the key!
Since mutual funds are market-linked assets, through them, you can invest money for good returns in various financial instruments. Some of them include equities, stocks, money market funds, etc. there is a higher risk involved in mutual fund investments and that explains the high return that they give you.
Broadly, there are two types of investment options under mutual funds: Equity Mutual Funds and Debt Mutual Funds.
Through equity funds, you earn a high ROI by investing in shares of multiple companies. These are some sort of market-linked securities.
The pattern of investment is: 65% of the investment goes into equities and equity related securities and the remaining 35% are invested in debt and money market instruments.
Go gain a steady ROI, you can consider investing in debt funds. Here, you will make investment in fixed-interest securities like government securities, treasury bills, etc.
Remember, the main focus behind a debt fund is to generate capital appreciation and earn the maximum interest.
2. Public Provident Funds (PPF)
A PPF is another type of long-term investment with high returns. One perk is that this is tax-free and you can easily open a PPF account in any nearby bank or post office.
This investment plan is government-backed, so it is guaranteed to be beneficial. The maturity period for your money will be around 15 years and you may even increase the time period by 5 more years. Under a PPF, you can even earn compound interest and invest money for good returns.
The only drawback regarding PPF is that you can withdraw money only at the end of 6th year- in case you need it for emergencies. Otherwise, you can just take a loan on PPF account balance. The premium amount can range between Rs. 500 to 1.5 lakh annually.
3. Unit Linked Insurance Plans (ULIP)
ULIPs are the best short-term investment options in India. With a lock-in period of 3-5 years, ULIPs come with the dual benefit of mixing insurance benefits along with investments.
A part of the premium is used for creating an insurance plan and the rest is used to invest in bonds, shares, etc along with the benefit of tax-exemption.
This type of investment is pretty flexible. You get a bandwidth to invest as per your risk appetite. The payment of premium is pre-defined and for the rest of the duration, you can simply enjoy the assured benefits.
4. Direct Equities
Direct equities offer you the highest returns possible in the whole investment market. They are definitely the most risky cases, but the rate of returns are much higher than any other investment instrument.
These are a form of long-term investments. Here, in order to invest money for high returns, you will have to open a Demat account. As an investor, as you will invest in direct equity, you will basically be signing legal terms regarding the ownership of the company.
Note: In order to make the best use of this type of investment, you must have advanced knowledge of stocks & shares. This is because you will have to do intensive research on your entry and exit time, the right stock.
At present, the 1 year, 3 years and 5 years returns in the market are 8%, 13% and 12.5% respectively.
5. Real Estate Investments
Real estate accounts for being the fastest growing sectors in India and is becoming one of the best investment options in India. It offers a wide array of assets to invest in- housing, commercial, manufacturing, retail, hospitality, etc. The investment is in immovable assets and risk is minute!
That’s because the value of your property will most likely increase within 6 months. You are free to sell-off your property once you feel the need of some liquidity.
Also, since investment in real estate lets you have a secured portfolio, it is less volatile and earn high returns.
6. RBI Bonds
RBI bonds are easy to comprehend- they are for a term of 7 years and provide you a ROI of 7.75% per annum.
You can invest money in RBI bonds to get high returns on investment. These bonds can only be furnished through the demat mode and are accredited to the Bond Ledger Account (BLA) of the bond holder.
You will get these assigned for Rs. 1000 and receive a certificate of holding as a proof. One of the prominent perks is that you can invest upto an unlimited limit. There are two options given to you: cumulative option (receive the re-invested interest) or non-cumulative option (receive interest as a regular income).
7. Gold ETFs
Gold Exchange Traded Funds offer both options of gold investment and stock combined. They are very easy to buy and sell- making them super liquid assets.
They are passive on the premises of gold prices in the market. It makes this procedure purely transparent. You can even use these as a security against a loan and make instant transactions.
You will receive high returns on investments, especially when the risks associated with market-linked tools are volatile.
8. Initial Public Offerings (IPOs)
IPOs are very famous options for investment with high returns. Under IPOs, new companies invite the public to buy their shares before they get enlisted into stock exchanges.
The prices are obviously low. Once the company gets listed, the value of stocks depends on the market conditions and performance of the company.
If the company performs well, you can consider IPOs to be a good investment option with a low risk involvement.
9. Bank Fixed Deposits
Fixed deposits are very well known investment options in India. As the name suggests, FDs offer fixed returns over the tenure of the investment.
As per your bank’s rule, you can get paid profits month to month, quarterly or yearly. These funds give your portfolio stability on surplus funds. The renewal of FDs is pretty simple.
You might even get easy access to the overdraft facility. In addition, the market conditions won’t affect your investment since the returns are fixed!
10. Post Office Monthly Income Scheme
As you can pretty much derive from its name, the post office monthly income schemes are managed by post offices across India and offer you to save monthly.
It is an investment with high returns. You can easily start a Post Office MIS (POMIS) account with a minimum of Rs. 1500 individually or jointly.
The best thing is that it is government backed and the returns are assured. Maturity period is 5 years.
You will earn monthly income in the form of interest. Also, you open more than one account in your name. However, it does NOT provide a tax-exemption facility.
You can invest money for high returns to not only achieve your present goals but also to create a safety cushion for the future.
In order to invest safely and earn the highest interest, that is the returns, you must not depend highly on just one investment option or just one earning source.
Investment market is all about exploration and forecasting powers. If you can play well in these two, you are here to stay!
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