To build your wealth, it is essential to not just save money, but also knowing where to invest money, and to choose the best investment plans for your financial security and money management. If you want to generate maximum returns, you can explore the following 5 investment options:
1. Public Provident Fund (PPF): Public Provident Fund is a popular investment option. It offers risk-free and guaranteed high returns, with full tax exemption. You can invest a minimum amount of Rs. 500, to a maximum amount of Rs. 1.5 lakh. It has a high interest rate as compared to fixed deposits and recurring deposits – it is currently 8% per annum.
2. ULIPs: ULIPs is an integrated plan that offers both investments and insurance at the same time. In ULIPs, the individual chooses a portion of the investments for stocks and bonds, and the remaining amount is maintained as a life insurance cover. There is a risk element that comes with it; but you can mitigate it by using the free fund-switching feature available under your plan. It allows you to transfer your units freely between different types of fund options – equity funds, debt funds, balanced funds etc. ULIP is one of the few market-linked investment options that offers tax-benefits under Section 80C of the Income Tax Act, where an annual investment up to INR 1,50,000 is exempt from taxation. What’s more, even your maturity benefits are exempt from taxation under Section 10(10D) of the Income Tax Act, provided your annual premium is equal to or less than 10% of your Sum Assured amount.
3. Stock Markets: An equity investment can generate higher returns than any other forms of investments; however, they are also the most volatile. If the investors are well informed about the market and the risks, then a direct equity investment can generate the most amount of profits.
4. Initial Public Offerings (IPO): IPOs are also known as stock market launch. It is the first time companies open investments to the public. Companies invite the public to buy their shares without stock exchange listing. Moreover, once the stock is listed on exchanges, then you can easily exit as well. An IPO that is priced well can be a great option for maximum returns.
5. Post Office Schemes: Post office schemes are the best options, if you want an investment avenue that has a short locking period. The monthly income scheme is one of the safest options for your funds as it offers high returns with no risk. The fixed monthly income rate offered by the Indian postal service is at 8.5% per annum.
These are some of the conventional investment options that offer high returns. Given below are a couple of securities you can invest in if you want to diversify your portfolio –
- Real Estate: Buying and reselling buildings and land is a brilliant investment option. It can be utilized as an overall wealth building strategy, provided you have a good sum to invest. It is, however, important to consider all the charges and other information about it.
- Gold ETF (Exchange-Traded Funds): Gold ETFs is ideal for small investors and for beginners. It is better than buying actual gold, because it is held in electronic format and you don’t need to worry about adulteration/impurities. It offers great liquidity and is also a safe option for high returns.
Now that you know about these different investment plans that offer high returns, you might be thinking “Which one should I ultimately invest in?” Ideally, you must go for an investment option that, apart from providing you with good returns, fulfils all your financial obligations at the same time. You could meet your life insurance plus investment needs by investing in just one comprehensive financial product – a ULIP. Learn more about ULIP plans, look at all the available options out there, and go with the best investment option for yourself.