Every family man in India should have a substantial investment plant. Investing your hard-earned money in the right investment schemes can double your wealth over time. It will help ensure a continued income when you retire.
You will still have enough wealth to sustain your lifestyle once when you are not healthy enough to work anymore. Here are 10 excellent investment option to pool your income into :
Public Provident Fund
PPF is an investment scheme backed by the Government of India with a lock-in period of 15 days. It provides an interest rate of 7-9% and is one of the least risky investments schemes with a high level of return available in India. The interest rates are renewed every year. You can open an account with as little as Rs.100. You can invest monthly, quarterly half-yearly or annually. It is also exempted from tax.
Mutual funds have over the course of time gained a lot of traction as a good investment option. Investors’ money is pooled in and is managed by a professional fund manager. There are various subcategories known as equity mutual funds, debt mutual funds etc. Equity-linked savings schemes are exempted from taxes. While mutual funds pose market risks, nevertheless it is one of the most high-returns investment options.
Family Health Insurance
Health Insurance has many advantages, apart from being an investment option. While a family health insurance plan will protect all your family members against medical expenses, it is also exempted from taxes. Investing in a good family health insurance policy is highly recommended in these times of rising medical costs.
Bank Fixed Deposits
A risk-free high return investment option, Fixed Deposits in banks are one of the popular investments options opted by many. They have cumulative and non-cumulative options. Depending on the bank policy, the returns will be paid to you on a monthly, half-yearly or annual basis.
In Recurring Deposits, you can deposit regular amounts in banks and enjoy the interest of the deposit after the maturity period. The minimum amount that you can deposit varies from bank to bank. The minimum tenure period is six months, and the maximum is 10years. You can use this deposit as collateral and take loans against this.
National Savings Certificates
NSC is also another low-risk investment scheme backed by the government. It is issued by the India post and is available in every post office in India. The interest rate is 7.9%. It gets compounded annually; however, you can only get it paid at the end of the maturity period. The lock-in period is 5 years. NSC is also tax rebatable.
Post Office Monthly Income Scheme
You can either invest individually or jointly in the POMIS scheme and reap the benefits of the interest. Even minors aged above 10 can invest in this scheme. The tenure period is 5 years. The interest is credited into the savings account of the investor in the post office. If you would like to withdraw the amount before the tenure period, you can do so after one year by paying a penalty.
RBI Taxable bonds
Indian citizens can invest in taxable bonds, issued by the RBI on behalf of the Indian Government. It has a tenure period of seven years. It comes with cumulative and non-cumulative options. The non-cumulative option has a half-yearly interest payment. You can purchase these bonds with a minimum investment of ₹1,000 and with no upper limits.
National Pension scheme
A government-sponsored pension scheme, you can invest a certain amount to your pension account while you are working and reap the benefits of it after retirement. Anyone from 18 to 60 year old can join in this scheme. This is also eligible for a tax deduction up to Rs 1.5 lakh. Being a long-term investment option, you can only withdraw the amount when you turn 60.
The ideal long-term investment option, direct equity is when we invest in the equity share of a company. It legally means buying a part of the ownership of the company. Whatever total amount the company wants to raise is broken down into small fractions called shares. When we buy these shares, we get to be a part of the decision makings of the company. Once the company earns a profit, this is divided among the owners as a dividend. However, direct equity is also a high-risk investment.