Earn interest up to 8.10% p.a. by investing in a Bajaj Finance Fixed Deposit | Rated CRISIL AAA/ STABLE and [ICRA]AAA(stable)

What are Investments?

An investment is any asset that is acquired with the intention of generating income or appreciation. An investment is typically purchased not for consumption but rather for future wealth creation. Investments are important to secure your financial future, especially given the rising inflation rates. There are a number of asset classes you can choose from based on your risk appetite, time horizon, saving goals, age, etc. Some of the best investment options in India include equities, FDs, bonds, mutual funds, ETFs, etc. Read on to know more about the best options to invest money.

What to Consider Before Investing?

Investing is a personal choice and will differ from person to person depending upon their financial goals and priorities. Your investment decisions are highly dependent on your income level, risk appetite, financial goals and a number of other factors. Let’s take a look at some important factors that you should consider before making any high return investments in India or any other investments, for that matter. 

  • Risk Appetite

There are a number of high return investments in India, however, it’s crucial that you analyse your risk appetite before making any investment decision. Risk appetite refers to the optimum level of risk you’re willing to take in the pursuit of investment objectives. Your risk appetite is generally dependent on your age, dependents’ ages and other personal circumstances. It’s also important to consider market conditions and other macroeconomic conditions while factoring in your risk appetite for making investment decisions. 

 

Generally, riskier financial instruments tend to yield higher returns, especially if held in the markets for longer periods. However, during times of economic downturns, riskier investments tend to fall much more dramatically than safer investment options. This is why it’s imperative that you diversify your investments. 

  • Financial Goals

Your investment decisions are heavily dependent upon your financial goals. The best option to invest money is often one that suits your financial goals.  For example, if you’re young and have no dependents, your risk tolerance might be higher and you’re likely to stay invested in the market for longer periods of time, meaning you can afford to take more risks in return for higher returns. 

 

However, if you’re in your 40s and 50s and are investing primarily for retirement and for your dependents, you might be better positioned to make less risky investments such as bonds, FDs and treasury bills that offer slightly lesser returns but are much safer alternatives. 

  • Time Horizon

Another important factor that you should consider while making investments is the investment time horizon. Generally, you may invest in riskier instruments such as mutual funds and equities when you do not have immediate use for the invested funds and can afford to stay invested for longer periods of time. This will ensure that your investments grow and take full advantage of the power of compounding. Additionally, staying invested for longer will make up for market volatility. 

 

However, if you’re saving up for retirement or any other specific goal and do not have a lot of time to stay invested, you should consider investing in safer financial instruments that do not fluctuate too much and offer guaranteed returns. This would include FDs, government bonds, sovereign gold bonds, PPF, etc. 

What are the Different Investment Options in India?

There are a number of investment options in India for all kinds of investors, whether you’re looking to park your funds safely with guaranteed returns or looking to take risks for higher returns. 

 

Some high return investments in India include direct equities, mutual funds, IPOs, ULIPs and gold ETFs, etc. PPF, RBI bonds, bank and NBFC FDs and RDs are some of the best low-risk investment options in India. 

 

Ideally, your investment portfolio should include a good mix of low risk and medium to high risk financial instruments so that you can ensure safety of capital while also maximising your returns. 

How to Choose the Right Investment Option?

In order to  choose the best investment options for your portfolio, it’s important that you establish what your priorities are, how long you can afford to stay invested, your risk appetite and whether you prefer a lump sum payout or regular payouts. Once you’ve established your financial goals and positions, you may begin looking for the best options to invest money. 

 

If safety of capital is the most important aspect for you, then look for safe investments with assured returns like FDs and RDs. However, if you’re looking for growth as well as safety, look for relatively safe investments with high returns such as Post Office Monthly Income Scheme, National Pension Scheme, ETFs and certain kinds of mutual funds. 

 

If you can afford to stay invested for longer periods of time and have fairly higher risk tolerance levels, you should consider investing in equities and mutual funds as they offer higher rates of return. Staying invested for longer periods of time will ensure that you’re able to combat the volatility that comes with investing in equities and mutual funds. 

 

There are a wide range of high return investments in India, this can make choosing the best investment option a little tricky. Here’s a comprehensive table to help you determine the best investment options for you. You can explore both high return investment in India and safe investments with high returns, in this table.  

Best Investment Options in India

Investment Options

Time Horizon

Ideal For 

Risk Involved

Returns 

Mutual Funds

Medium to Long-term

Long-term investors with higher medium to high risk tolerance levels 

Medium-High

Dependent upon the type of mutual fund

Bank Fixed Deposits

Short to Long-term

Investors who prefer safety of capital and assured returns

Negligible

Dependent upon prevalent interest rates

RBI Bond

Usually 7 years

Investors who prefer safety of capital and assured returns

Negligible

Around 7.75% p.a

Treasury Bills 

You may choose between 91 day, 182 day and 364 day tenors

Investors who prefer safety of capital and assured returns

Negligible

Around 7.17% paid on face value

Unit Linked Insurance Plan (ULIP)

Has a lock-in period of 5 years

Long-term investors with higher medium to high risk tolerance levels 

Variable, depends on your fund choice

Market-linked

Initial Public Offerings (IPO)

N/A

Investors with high risk tolerance 

High

Market-linked

ETFs

N/A

Investors with medium to high risk tolerance

Medium to High

Market-linked

NPS

Till retirement

Long-term investors

Medium to High

Market-linked

PPFs

15 years

Long-term investors

Risk-free

7.1%

Gold ETFs

Medium to Long-term

Conservative investors

Low-risk

Around 8-10%

Guaranteed Saving Schemes

10 to 20 years

Long-term risk-averse investors 

Low-risk

6-7%

Investment decisions are highly dependent on your personal goals and circumstances, which is why it’s crucial that you exercise due diligence before making any investment decision. There are a number of high return investments in India, however, you should factor in your risk appetite, financial goals and time horizon so as to make optimal investment decisions that maximise your returns while minimising risks. Calculating the returns manually can be a time-consuming and tedious process. This is where the FD maturity calculator comes into play. Enter the investment amount, interest rate and tenor, and your expected return on maturity will be calculated within seconds.