Shortlisting investment options can be tricky, especially for those clueless about the merits and demerits of the various financial products afloat in the market. Unfortunately, most newbies spend time looking for a high-yielding and low-risk product instead of gathering information about investment plans. However, the seasoned investor knows that no investment plan offers the magic combination of high returns and low risk. In India, all investment options work on the basic principle- the higher the risk, the higher the returns. Instead of wasting time hunting for the magic combination, one should choose investment plans based on personal priorities and risk appetite. But not everyone has the bandwidth and time needed to study and compare investment plans, so we took it upon ourselves to identify the Best Investment Plans for You to Invest in 2022. Read on to find out.
Best Investment Plans for 5 Years
Although short-term investments offer moderate returns compared to long-term investment plans, they help investors maintain liquidity. Simply put, they offer investors the dual benefit of withdrawing funds at short notice whenever necessary and simultaneously building wealth for short-term goals. Listed below are the Best Investments Plans for 5 Years:
Large Cap Mutual Funds
Traditionally speaking, these offers annual returns between 10-12 percent over the short term and are among the Best Investment Plans for 5 Years.
Short-term Debt Mutual Funds
Short-term debt funds have an investment horizon of 3 and sometimes 4 years, and are ideal for investors with short-term goals. These manifest gains by lending to companies that have a proven record of repaying loans and therefore are accompanied by stable annual returns, meaning they are ideal for investors with a conservative risk profile.
Company Fixed Deposits
Company FDs, aka Corporate FDs, are floated by non-banking entities and NBFCs. They have relatively shorter maturity horizons and offer better returns than Bank FDs.
National Savings Certificates
NSCs are savings bonds issued by the Government of India. They’re primarily used for small savings and income tax saving investments and offer annual returns at a rate of 6.8 per cent.
Fixed Deposits
Commonly known as FDs, Fixed Deposits are term deposits offered by banks, wherein investors park a certain sum of money with their bank to earn returns at a predetermined rate of interest over a fixed investment tenure. The rate of interest offered varies depending upon the entity floating the scheme and the tenure of investment.
Best Investment Plans in India for the Long Term
Goals that have a horizon of 10 years or more are usually identified as long-term. Consequently, long-term investments are aimed at financing distant goals, like retirement, marriage, house purchase, etc. Listed underneath are the Best Investment Plans in India for the Long-Term.
ELSS Mutual Funds
These have a high potential for extravagant growth over the long term. Besides this, the tax benefits offered under Section 80 C of the Income Tax Act make ELSS schemes one of the Best Investment Plans in India.
Mid Cap Mutual Funds
This mutual fund category is best suited to young investors and professionals. Young investors have a high risk-taking capacity and, therefore, can eye the relatively higher returns Mid Cap funds tend to generate. Also, they have time on their hands and consequently can stay invested for extended periods.
Public Provident Fund
PPF schemes, offer an annual interest rate of 7.10 per cent, and just like ELSS Funds, tax benefits under Section 80C of the Income Tax Act.
Gold ETF
These are units representing physical gold listed on the exchange. Traditionally speaking, they offer moderate annual returns and can be traded like shares.
There you have it, “The Best Investment Plans for You to Invest in 2022.” Let us know your thoughts about this post by replying in the comments section. Also, check out our post on “Key Investing Lessons 2021 Taught Us.”
