Connect with us


Best Long-Term Investment Options In India For 2019



Best Long-Term Investment Options

1. Public Provident Fund (PPF)

Public Provident Fund is one of the best long-term investment avenues in India. This option is utilized by almost every Indian for the tax saving purpose.

The PPF account can be opened at any authorized bank and post offices by the Indian residents. Moreover, the deposit requirement of the PPF accounts starts at the lowest point. That is one can invest from Rs.500 to Rs.1.5 lacs in the PPF account. The tenure for the deposited amount can be varied from 5 years to 15 years. However, the interest rate for the PPF is decided and announced by the Government of India.

Currently, since October 2018 the interest rate on PPF account is 8% per annum. The interest is compounded annually in this mode. So with the investment in PPF account, you can be assured with the decent annualized returns. The instrument only possesses interest rate risks. Below are the highlights of the PPF account features.

  • Annual Deposit amount Rs.500 to Rs. 1.5 Lakhs per year
  • Tenure 5-15 years
  • Interest rate 8% (Since October 2018)
  • Partial Withdrawal Term 7 years
  • Tax Benefit Deposits are Eligible for 80C deductions. Interest earned is tax-free.

With the above features, we can evaluate that the avenue is the low-risk avenue. And can be very useful in the longer run.

2. National Pension Scheme (NPS)

National Pension Scheme (NPS) is a retirement scheme which forms a great long-term investment option. The NPS is regulated and governed by the Pension Fund Regulatory and Development Authority (PFRDA). The scheme allows investors from the age group of 18-60 years. It is based on a Unique Permanent Retirement Account Number (PRAN) which is allotted to you once you subscribe to the scheme. Here are the key features of the NPS.

Investment Required Rs.6000 – No Cap for maximum
Tax Benefit Allows you to get an added deduction of Rs.50,000 under 80CCD(1B) more than Rs.1.5 lac under 80C. That is in total you can avail a tax benefit of Rs.2 lac.

One of the biggest benefits of NPS is a possibility of higher returns than traditional options. As NPS invests part of the money in equities and remaining in debts. Therefore, the avenue forms a great option to earn returns with safety.

3. Post Office Savings Schemes

Apart from the above two, post office saving scheme(POSS) is another investment avenue which is suitable for the longer term. The people in a need of regular income can opt for the monthly income plan from POSS. It is government-backed investment mode due to which carries very less risk.

National Savings Certificates (NSC), National Savings Scheme (NSS), Kisan Vikas Patra, Monthly Income Scheme, Sukanya Samridhi Yojna, and Recurring Deposit Scheme are the key offerings of the post office saving schemes.

4. Bank Deposits

Bank deposits are one of the traditional investment avenues. This mode still seems good in the case of long-term investing. Fixed deposits and Recurring deposits are the two type of deposits which serves as a long run investment modes.

Fixed deposit, the name itself suggests the fixed return to the investor. It is a best suited to risk-averse investor. Fixed deposit is offered by bank, financial institution, and company. Anyone can invest in the fixed deposit.

On the other hand, recurring deposits allows investing on the periodical basis like every month. Both of these offers decent interest rates on the investment which varies between 8-10%.

5. Gold

Gold is an popular investment product among investors from all the classes. The reason behind the favoritism is its liquidity. You can enter and exit in this mode any time. Moreover, you can invest in gold through various formats like Gold deposit scheme, Gold ETF, Gold bar, Gold mutual fund etc. Investing in gold with these formats can give you below benefits.

  • You dont need a physical storage for gold.
  • Gold in this format is easy to buy and sell.
  • You incur zero making charges
  • There is no possibility of damage or theft

6. Real Estate

Real estate is also a great avenue for long-term investment. However it needs immense planning and huge capital. The real estate is the sector with the huge fluctuations. That is value of your property may increase in one or two years or may take many years. It totally depends upon the location and the connectivity your property have. In short, its an avenue with good returns in the long run but needs skill and a huge sum of money.

Real estate industry is among the booming industries in India. As it has huge prospects in all the major sectors like housing, commercial, manufacturing, hospitality, retail etc.

Real estate investments in India assures you great return varying 30%-100%. However, to avail that benefit, you need to do a proper research. Research to buy property in such places where prices could go up to some significant level in the upcoming years.

7. Mutual Funds

Mutual funds are the next in the list of best long-term investment options. Mutual funds need no introduction, as everyone has seen them as Mutual Fund Sahi Hai. Mutual fund are the investment vehicles which pools money from the investors and invest in the stock market.

It is a professionally-managed investment scheme, offered by asset management companies. As an investor, you can buy a mutual fund units. A unit is a share of customers holdings in a particular scheme. These units can be redeemed as and when needed at the funds current net asset value (NAV). The NAV of a fund changes on the basis of changes in the prices of the funds holdings.

So, every investor incurs gains and losses proportionally with the change in value funds holdings. The value of holding depends upon the market movement. Mutual funds serves the requirement of all type of investors with all various risk appetite. As it offers various options under various schemes. Like for the aggressive investors’ equity mutual funds serves as the best option. On the other hand for risk-averse investors debt mutual funds are the ideal option.

Mutual fund as an investment option offers many benefits. Here are some key benefits you get by investing in mutual funds.

You get a Professional Management
Utmost Liquidity
Ready-Made Diversified Portfolio

8. Direct Equities

In the above discussion, we have seen the investment options which can offer you decent returns. However, the only investment mode which can offer your manyfold returns is the s Direct equity investment. The best example which can prove this is D-Mart (Avenue Supermart) IPO.

“If you have invested in Avenue Supermart IPO in March 2017. You would have got 50 shares by an investment of Rs.15,000. However, as on date ( 6th December 2018) value of those 50 shares would be approx Rs.75000. That is you have missed a profit of Rs. 60,000 which is almost 400% in the last 20 months.”

There are many examples of the guru investors like Rakesh Jhunjhunwala, Dolly Khanna who have created wealth through the Direct equity investments. Direct equity investments provide you with the best returns among all other long-term investment option. However, the risk involved is also higher than others. But with a professional advice, and thorough analysis you can easily earn higher returns through markets.

To earn higher returns from the Direct equity investments, all you need is to pick right stocks at right time. The stock price movement is directly dependent upon the companys growth potential. So, investing in the right companies in the stock market can lead to best returns.

The risk constraints get offset when you back your investment decision with a research and analysis. Despite the fact that the stock market has not been so great this year. But still investing in stocks over a long run makes a fine way to create and enrich your wealth. The downfall in the year 2018 has created many opportunities like D-mart in the above example. Though they are not IPOs but the companies possess the huge potential to reap great returns in the upcoming years. Its not too late if you havent started your direct equity investments. But missing the current opportunities would be lethal.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Copyright © 2024 Regular Station. Powered by KlassicWeb.