7 best investment plans with high returns
Choosing the best investment plan with high returns require knowledge of the various available instruments. You also need to take into account your financial goals, risk appetite and investment horizon among others.Sidharth Kapoor
Identifying prudent investment avenues to compound wealth to accumulate a sizeable corpus for various life goals is an essential aspect of financial planning. Investment doesn’t follow a one-size-fits-all approach to financial goals and risk appetite are different for every individual.
Among the various available financial instrument, it’s essential to choose those which best align with your life goals. Here are 7 best investment options that give you high returns.
1. Unit-linked insurance plans (ULIPs)
Weaving insurance and investment into a single product, ULIPs are one of the most effective financial tools that help generate inflation-adjusted returns. A value-packed investment instrument, ULIPs invest in various underlying funds of different asset classes – equity, balanced, debt – to generate returns.
Not only they give you the flexibility to choose the funds as per your risk-appetite, but also allow partial withdrawals after the 5-year lock-in period. Top performing ULIPs can offer you double-digit annual returns.
2. Mutual funds
Giving retail investors the opportunity to venture into equity markets in a structured manner, mutual funds have dramatically changed the investment landscape of the country. Expected to be a part of the monthly wallet for most Indians in the coming days, dedicated and systematic investments in mutual funds helps you build a sizeable corpus for your critical financial goals, beating the effects of inflation.
The power of compounding that has a multiplier effect on your wealth when you remain invested for the long-haul makes mutual funds, especially equities, one of the best investment plans in India. Just like ULIPs, top-performing equity mutual funds can offer you double digit annualised returns.
3. Savings plan from NBFCs
Of late, many prominent NBFCs are offering savings plan which helps you to accumulate wealth to address various life goals. Guaranteed returns coupled with customised pay-out options, make these saving plan one of the best investment options.
These savings plans allow you to choose a flexible policy term attuned to your future goals and help you save and compound your money for a rainy day.
4. Fixed deposit
A tried and tested financial instrument, fixed deposits offer you guaranteed returns on your investment. Irrespective of a declining interest rate, fixed deposits are one of the most preferred modes of investments for most Indians. You can easily open a fixed deposit in a bank or a post office of your choice. Today, even NBFCs allow you to book FDs.
If you want to park your money in an instrument that’s latent to market volatility, fixed deposits are your best bet. You can earn a higher interest rate on FDs offered by NBFCs.
5. Public provident fund (PPF)
One of the best investment plans in India, PPF is a savings cum tax instrument that helps you build wealth for retirement. Though it’s has a long lock-in period, 15 years, the same works in favour of the investor as it gives the money more time to grow.
Also, PPF falls under EEE (exempt, exempt, exempt) category. It means the contributions made, interest earned, and maturity proceeds are exempt from income tax. The current interest rate on PPF, effective from 1st January 2018, is 7.6%.
6. National pension system (NPS)
With the age of pre-defined pension benefit over, investment in the national pension system (NPS) ensures you receive a monthly pension when you hang up your boots. Though initially, it was only aimed at central government employees, but now anybody can invest in the NPS.
With allocation in equities, corporate bonds, and government securities, NPS helps you build a sizeable corpus for your twilight years. Contrary to the earlier provision, now 40% of the NPS corpus is free from tax even for non-employee subscribers.
7. National savings certificate (NSC)
A prudent mode of investment, NSCs come with a maturity period of 5 years. With investments made up to Rs. 1.5 lakh eligible for tax deduction under section 80C of the Income Tax Act, the interest earned not subject to market volatility, and you can also use your NSC certificate as a collateral for a loan.
Also, interest earned on NSC certificates are not subjected to TDS which adds to the maturity amount. Currently, NSC certificates give you an annual return of 7.6%. This rate is revised by the Central government on a quarterly basis.
Choosing the best investment plan would help you meet various needs at different stages of your life. Make sure to make any investment decision with a financial goal in mind as will give you a sense of prolonged gratification.