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Top 5 Financial Assets for Money Investment in India

Team Jar
November 29, 2022
Top 5 Financial Assets for Money Investment in India

Investment and financial stability go hand-in-hand. To know the best 5 investment options in India, check out this article!

As an investor, we often look for options to grow our money faster. Sky-high returns with less chance of losing our principal money is the ultimate dream for many of us. This is the reason why people always look for no-risk plans which can double their money in just a few months!

However, do you think such a utopian investment option of low-risk and high-return actually exists? It mostly does not. And while most people realise this fact, many often get scammed due to these false hopes. 

Risk and returns are birds of the same feather- the greater the former, the greater the latter! 

But hey, this doesn’t mean that you have to run away from investing your money. The only thing to be taken care of is the right risk balance in your investment portfolio. 

You must balance a risky scheme with a no-risk one. For instance, if you are investing in equities, you must also side-by-side manage a stable investment of digital gold! 

Plus, your own risk appetite cannot be neglected. To take a risk that you can’t mentally digest is nothing but an addition to your stress. Therefore, if you aren’t comfortable with too much risk, make sure that a major part of your portfolio is made up of stable and assured investments. 

Returning to high returns, active investors often look for a long-term gain that will secure their financial health even in inflationary periods. 

To help you wisely choose items of your high-risk portfolio, let’s first see broadly what options are available. 

In all, there are two buckets to sum up all your investment products. These are: 

1. Financial assets 

2. Non-financial assets

To be more precise, financial assets include options which are either market-linked products (like stocks, mutual funds, etc.) or fixed income products (like PPF, Bank Fixed Deposits, etc.). 

Whereas, non-financial assets include assets like physical gold, real estate, etc. No doubt, a majority of Indian households are highly active in the non-financial assets, which is less risky, rather than investing in financial assets that give high returns. 

If you have some financial ambitions to fulfil, here are the investment options that you must consider! 

They might be risky, but are totally worth it to sustain your financial health.  

Best investment assets to invest in for Indians!

1. RBI Taxable Bonds

Current RBI Floating Rate Savings Bonds can be considered successors to the previous RBI Savings Bonds which were stopped in 2020. 

The common thing between them is that they both are taxable, i.e., when you invest in them, your returns above an extent can be effectively taxed. 

Still, these bonds are great investment options. Especially if you are looking for long-term sustainability in your portfolio. 

The new bonds that are being insured by RBI have a unique feature- the interest on them is subject to reset every 6 months! 

That is, they can effectively take care of the market conditions and give you stable returns. Instead of earning a fixed interest rate even when you can actually get something higher, your financial health can actually get secured. 

2. Equity mutual funds

Equity mutual funds are specifically designed to invest in equity stocks. 

As per SEBI Mutual Funds Scheme, an equity mutual fund investment is the one that invests at least 65% of its assets in equities or equity-related instruments. 

One thing to be noted is that the equity funds can either be actively managed by you or passively managed. 

They are also categorised based on location: domestic (if you are investing only in Indian companies) or international (considering the foreign companies). 

Remember that in the case of an actively managed fund, the returns totally depend on the manager’s ability to generate returns. 

Whereas, options like Index funds or Exchange Traded Funds can be managed only passively. 

While the risk in case of equity mutual funds can be very high depending on market-capitalisation or the sector of the company that you invest in, the returns are always exceptionally high. 

So, if you love risk and aspire some high returns, equity mutual funds are the right option for you. 

3. Debt mutual funds

After the roller coaster of risky equity funds, if you think high returns might not be in your luck, well, we can change that! 

If you are someone looking for steady returns and not necessarily spike highs, debt mutual funds are the right option for you. 

Clearly, these are less volatile and hence pretty low in risk as compared to equity funds. Since we mentioned steady returns, debt funds predominantly invest in fixed interest generating instruments like corporate bonds, government securities, treasury bills or commercial paper, etc.. 

While the risk is low it is necessarily not absent in this case. 

The risk may be interest rate related or credit related, whatever it is, make sure that you read the terms & conditions carefully and fully understand the scheme before putting your money in. 

4. National Pension Scheme (NPS)

NPS, as you may know, is a long-term retirement focused investment instrument. It is a well balanced plan that carefully balances the risk and gives you good returns. 

It mixes equities, corporate bonds, securities, FDs, liquid funds, etc. and many more instruments. Plus, you get to decide how much of your money goes into the risky equity bonds. 

Also, to remain an active Tier-1 NPS investor, the minimum annual contribution has been reduced to Rs. 1000 from Rs. 6000. 

You can manage your portfolio and earn stable returns through this investment. So do consider it if you aren’t able to decide where to specifically invest!  

5. Public Provident Fund (PPF)

Ever heard the benefits of compounding? Imagine what that can do to your money when mixed with a tax-free interest earning scheme! That's what PPF investment instruments do. 

Yes, PPF has a long tenure of around 15 years. But this long tenure can completely change your financial stability. 

Since PPF gives benefits of compounding and that too with tax-free interest earnings, your money grows faster than you can expect. 

Plus, if you are sceptical about losing your money, do not worry since this is a completely safe and secured investment. 

The principal invested by you and the interest earned are both backed up by sovereign guarantee

Also, interest rate on PPF is subjected to a quarterly review by the government. 

Investment is a crucial step for a financially stable life. In order to reap the actual benefits of savings, multiplying your money and tackling inflation, investment is the only instrument. 

These above mentioned top 5 investment ventures in India are the first choice for any successful investor. 

Along with risk, they give you very high returns. So, balance your risk profile and invest actively to gain financial stability in future!

Download the Jar app and start your automated savings plan. With Jar, you can start investing in digital gold with just Rs. 10 and save your spare change. With options like round-off of your spare change to exciting daily spins, Jar can shield your finances.