Choosing the best investment options for wealth management is an area of concern for people of all income groups. So, opting for the top investment options in India is one way you can make your mo
Disclaimer:
In Unit Linked Policies, the investment Risk in the investment portfolio is borne by the policyholder.
Written by
Kriti Arora
Insurance Writer
Kriti is a content marketing and branding expert with more than 13 years of rich experience across BFSI and Telecom industries. She is currently leading Digital Creative Strategy for Axis Max Life Insurance.
Reviewed by
Vaibhav Kumar
Insurance Expert
With over 15 years in life insurance, Vaibhav is a recognized products and digital leader for driving innovation at Axis Max Life. He's played a pivotal role in developing new business lines and implementing successful D2C strategies.
Listed below are some of the key features of the leading investment options available in India:
|
Investment Options |
Ideal Investment Period |
Tax Benefit |
|
Fixed Deposit |
6 months up to 5 years |
Section 80C benefit available only with 5 Year Tax Saver FD |
|
Mutual Funds |
Less than 1 year to over 5 years depending on type of fund (debt, hybrid or equity) |
Section 80C benefit only available with ELSS mutual funds |
|
Direct Equity |
3 years and longer |
No tax deduction benefit as per current tax laws |
|
Post Office Savings Scheme |
6 months up to 5 years |
No tax deduction benefit as per current tax laws |
|
Bonds |
1 year to over 5 years |
No tax deduction benefit as per current tax laws |
|
National Pension System (NPS) |
Till superannuation when subscriber attains the age of 60 years |
Tax deduction available under Section 80C and Section 80CCD (1b) on self-contribution |
|
Unit Linked Insurance Plans (ULIPs) |
Over 5 years |
Section 80C benefit available on investment and Section 10 (10D) benefit available on maturity proceeds |
|
Liquid Funds |
Less than 1 year |
No tax deduction benefit as per current tax laws |
|
Public Provident Fund (PPF) |
15 years and longer (renewal allowed in 5 year blocks post initial 15 years) |
Tax deduction benefit under Section 80C available on investment |
|
Senior Citizen Savings Scheme (SCSS) |
5 years up to 8 years (extension of 3 years allowed post initial 5 years) |
Tax deduction benefit under Section 80C available on investment |
It is notable that the ideal investment period provided above is for illustrative purposes only. In many cases especially market-linked instruments, the actual period of investment may be longer or shorter in response to current market conditions. The tax benefits mentioned above are only applicable if the investor has opted for the old tax regime. Tax laws are subject to periodic change so taking the help of a financial advisor is recommended when selecting an investment that is in line with.
Fixed Deposits (FD) are often considered amongst the safest, stable, and among the best short term investment options. You can invest in fixed deposits for the following reasons:
All these reasons make a fixed deposit one of the best investment options, which also offers guaranteed returns. If you are seeking a healthy balance between returns and safety, you can start investing in fixed deposits as soon as possible. You can also opt for a monthly basis saving option provided by most banks and other financial institutions.
While investment in mutual funds is subjected to market risk one should evaluate the risk before investing. If you understand the market and its risks, mutual funds can become your best investment options to grow money multifold. Whether you are going for short term investments or long term, you can create an investment portfolio based on your preferences.
If you have a lower risk appetite and want a fixed income from mutual funds, monthly systematic investment plans, or systematic withdrawal plans can be good investment options. It can also be a favourable choice if you are looking for a high return investment in India.
One of the first things you should figure out is whether you are looking for long term or short term investments. Direct equity investing is one of the best investment options for long term purpose. It is about the equity shares of a company, which binds you in legal terms related to the company ownership.
By buying a company’s shares, you also get the right to get involved in company meetings and have your say on the company’s decisions. Also, you get the profits as distribution in proportion to your shareholding in the company.
As an investor, you must know that a company’s performance has an impact on the share price, both positive and negative. Depending on the market conditions and your risk appetite, you can also choose to give up the shares back later either to the company or a third party.
These are deposit avenues for investors made available by India Post, the body that controls postal chain in the nation. This investment option was once introduced to help people inculcate the habit of disciplined savings in life while also providing investment avenues to aid in financial planning.
What makes these schemes one of the best investment options is the ease of enrolment or application. You can invest in these savings schemes by visiting the nearest post office branch.
Saving schemes that fall under post office investments include:
National Pension Scheme is a government-initiated investment option, which have the objective of securing the financial life of a citizen after retirement. Think of NPS as the best investment plan in India if you have minimal or no risk appetite and want to save for your retirement.
Under this scheme, you can invest in government bonds, equity, and other alternative investment options as per your preference. Not only NPS is one of the best investment options, but it is also the safest option to save and grow money for retirement. You can start investing in the National Pension Schemestarting from Rs 500, having an interest rate of ~8-10%.
Just like individuals, companies and government bodies need fund for infrastructural development and social programs, for which they issue bonds to the public markets. The interested investors then buy the bonds to help these entities raise money.
In other words, bonds are fixed-income investment options that cover the loan made by an investor to a corporate or governmental borrower.
What makes them one of the best investment plan in India is that the terms for fixed interest payment, loan principal, and tenure are all included in the bond details. Hence, it assures you of the safety of your investment along with an additional return.
Also, bond prices are inversely proportional to the offered interest rates. It means that these price fall when interest rates increase and vice versa.
Another investment option for individuals who want market linked returns along with insurance is Unit Linked Insurance Plan; (ULIP). You can buy a life insurance which helps to invest in different funds and give you life cover option at the same time. ULIP has become one of the best investment plan in India.
This top investment option in India offers dual benefits of insurance and market investments, which helps you systematically grow your money. You can choose the most suitable policy tenure based on whether you prefer long term or short term investment options. Additionally, ULIP also offers tax benefits under section 80C of the Income Tax Act 1961.
Liquid funds are like stock market investments, wherein money is invested in government bonds and securities. Since there is no lock-in period, it allows you to withdraw money as per your requirement; thereby making it one of the best investment options in the market.
When it comes to short term investments, liquid funds are the one of the best investment options in India. You can invest in it for 3-5 years and withdraw money as per your requirement for fulfilling your short term goals. They are less subject to market risks than mutual funds, which also makes it one of the best investment options.
What attracts senior citizens in India to this scheme the most is the interest gained over savings. Currently, the SCSS interest rate is 7.4% as of Quarter 1 for FY 20-21, which is the highest amongst other saving schemes available in Ind Types of Investment & Their Risk Profiles
A government-backed investment option, Public Provident Fund, provides you risk-free returns making it one of the best investment options. The interest is revised and paid by the government every quarter.
Although the maturity period of PPF is 15 years, you can start the partial withdrawal of your money after completion of six years. However, you can also use your PPF balance as security to take loans. It falls under the EEE category of tax savings, since the principal amount, interest earned, and maturity amount – all are eligible for tax savings. Thereby PPF is one of the best investment options available. As per Section 80C of the IT Act 1961, you can avail tax deductions for your contribution towards the PPF account.
As an investor, you must make investment decisions based on your risk appetite. Based on the associated level of risk, various investment options in India are classified as follows:
| Levels of Risk Involved | Investment Options | Description |
|---|---|---|
| Low | Fixed Deposit | Assured returns with no risk to investments |
| Low | Public Provident Funds | Government-backed investment option for retirement planning |
| Medium | Balanced Mutual Funds | Holdings that are balanced between debt and equity |
| Medium | Debt Funds | Mutual funds that invest in fixed-income securities like bonds |
| High | Direct Equity | Long term investment option to get ownership rights of a company |
| High | Equity Mutual Funds | Mutual funds that invest mainly in stocks |
When searching for suitable investment options in India in 2025, the first thing to do is to identify the goal of your investment and how much risk you are willing to take. Once you have figured these out, below are some key steps you can take to start on your investing journey:
To target your near future objectives, like buying a car, go for a short term investment option. Then comes long term goals, like buying a house or planning for your child’s higher education. For this, you need a long-term investment option like PPF, real estate, ULIP, and gold bonds etc. While for some, investing in one plan might work, for others, it is best to invest in multiple and versatile options.
Once you have made yourself a fool-proof investment strategy encompassing all the necessary elements discussed above, start investing and stay committed to gain the maximum returns. Realize the power of compounding and stay invested for as long as you can to gain the maximum returns from your invested money.
The below-mentioned are some of the important things to consider before investing in the best investment options in India, in 2025:
ARN: June24/BI/18B
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