To enjoy a comfortable financial future, investing is absolutely essential. People are always on a lookout for the best money investment ideas in India, where they can multiply their money in a specific time frame with minimum or no risk involved. In reality, the returns and risks are directly proportional to each other, which means the higher the risk involved, the higher the chances of returns will be. By investing in the best money investment ideas in India, you can not only achieve your financial goals but can also create a financial cushion for the future to live a secure life.
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6 Smart Investment Tips To Maximize Your Returns
If you want to start building your financial portfolio, you may have the following questions:
What is the best way to invest money?
What are the expected returns?
Where do I put my money?
Do you want to take risks and potentially earn higher returns, or do you want to make safe investments and earn a stable but lower return?
Here are some smart investment tips you should follow if you want to invest right and have financial stability in the future:
1. First of all scrutinize your money investment ideas
Understanding the various options for investing your money is one of the first things you should do when organising your finances.
Learn about mutual funds, bonds, gold bonds, stocks, and fixed deposits, and determine what kind of financial commitment they entail and whether it corresponds to your definition of financial stability.
2. Automate your savings
If you have a consistent source of income each month, you should ensure that a portion of your earnings go into your savings account. And now, thanks to technology, if you lack the willpower to do it, there are many apps that can assist you.
Chime provides a savings account that automatically saves a percentage of your paycheck each month, Acorns invests in a variety of low-cost ETF portfolios, and Plum assists you in managing your finances when you’re in overdraft.
You can also inquire with your bank about its apps and set up an automatic transfer of funds from your salary accounts to those designated for investment.
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3. Deal with your debts
Before you begin investing, you must deal with and finish paying off your debts, as well as avoid debt traps. For example, if you have high-interest debts such as student loans or credit card debts, you should prioritise paying them off before making any investments.
4. Invest your tax refund
If you struggle to save money when you receive your paycheck at the end of each month, here’s a tip: set aside all or a portion of your tax refund as an investment option.
5. Build an emergency fund
We all know how important emergency funds are after living through the pandemic. Building an emergency fund with your savings is critical, and a small amount can go a long way. You can save a portion of your monthly paycheck and create a rainy day savings that you should not touch unless absolutely necessary.
6. Get a personal financial audit
A personal financial audit can assist you in organising your financial situation. It can assist you in scrutinising your finances and determining whether you’re on the right track or at risk of financial disaster. You can learn about the weak points in your financial portfolio and how to strengthen them.
10 Money Investment Ideas To Get Maximum Return
Once you’ve done your research and understood these smart investment tips, here are the types of investment that you can consider. We will discuss in detail the top investment options in India, that can help the investors to achieve their financial goals. You can consider including these investment plans in your financial portfolio while saving for the future.
1. Put money aside for your retirement.
One of the most important goals of investing from a young age is to have a worry-free retirement where you can take care of your expenses.
Take advantage of your employer’s Employee Provident Fund (EPF) and try to match your employer’s contribution. These small steps will add up to a significant amount by the time you retire.
Consider a National Pension Plan (NPS), which is open to all but mandatory for all government employees. You can choose to invest a minimum of Rs 500 per paycheck or a maximum of Rs 6000 per year.
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2. Consider long-term investments such as PPFs.
Because the Government of India backs investments like the Public Provident Fund, investing for the long term is a safe bet. It is one of the most secured long-term money investment ideas amongst all the investment options in India. Furthermore, it provides tax advantages that exempt interest income from taxation. A PPF account can be opened in a bank or post office. The invested money is locked for a tenure of 15 years. Moreover, in this investment option, you can earn compound interest on the accumulated money. You can also extend the time frame for the next five years. In case you need the money, you can take a loan on the balance of the PPF account. The only drawback of having a PPF account is that you can withdraw the invested money by the end of 6th year.
3. Purchase Government Bonds
Government bonds are relatively risk-free and pay a fixed annual interest rate. The benefit here is that the borrowing entity refunds the investment amount once the maturity period is over.
4. Invest in equity-linked savings plans.
Equity-linked savings schemes are diversified equity funds in which you invest in the equity market by purchasing equity stocks of publicly traded companies.
Equity Linked Savings Schemes help you save taxes while also providing good long-term returns.
5.Include a Systematic Investment Plan (SIP) in your portfolio.
When equity mutual funds are invested for a long period of time, they produce highly efficient results. A great smart investment tip would be to invest in equity through the SIP route, which ensures that the cost of your units is averaged out and your returns are less affected during volatile financial markets.
6.Chit Fund Investments Can Help You Diversify Your Portfolio
In India, peer-to-peer lending has a long history. Community lending and chit fund investment models can help you diversify and protect your investment portfolio from the volatile stock market. The advantage of this method of investing is that you can withdraw your money at any time, and you get a higher return in a shorter period of time.
The Money Club is India’s trusted AI-powered digital chit fund platform. It provides a trusted, new age platform for savings, high returns and easy borrowing. The main objective is to provide a savings solution that is better, cheaper and more reliable than banking systems. Chit Fund is one of the oldest forms of investment to grow your money. FDs and RDs offer low interest rates of 3%-6%. In contrast, chit funds are a more lucrative investment where you can invest a fixed amount every month and earn higher returns (25% annually), and more value for money.
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7.Invest in Unit-Linked Insurance Plans (ULIPs).
ULIPs are plans that provide consumers the dual benefit of insurance and investment. The benefit here is that ULIP provides insurance and is a great way to invest their money. The way ULIPs work is simple: the policyholder can purchase an insurance plan for which the premium paid is used to provide a cover and the remainder is invested between equity and debt funds. ULIP plans come along with a lock-in period of 3 years-5 years.
8. Purchase Annuities to Help Stabilize Your Portfolio
Annuities are investment products offered by insurance companies in which the insurer accepts the investment capital and guarantees a return on the sum. There are several types of annuity plans available, including fixed annuity plans (with fixed returns), variable annuity plans, and equity index annuities (with returns determined by the performance of the stock market).
9.Senior Citizen Savings Scheme
Senior Citizens’ Saving Scheme (SCSS) is one of the risk-free tax saving investment options in India for senior citizens above 60 years. It is one of the best investment options for senior citizens because it offers them a regular income. The scheme provides a good rate of interest i.e. 8.6 interest per annum, which makes it a highly beneficial option of investment.
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10. Gold ETF
Gold Exchanged Traded Funds are tools, which are a combination of both gold investment and stock. The Gold ETF can be easily bought and likewise can be sold with any company stock. The Gold ETFs are instruments that are passive on the premise of the price of the gold making it transparent when it comes to pricing. Investment in Gold ETF provides high liquidity, which can be easily traded in the stock exchange.
The thumb rule of making a smart investment is to keep a proper understanding of the different types of money investment ideas available in the market. For most of the investors, the purpose of the investment may vary depending in terms of financial objective, period, and risk levels, so forth. Thus, to make the money grow, an individual needs to invest in smart money investment ideas that can generate lucrative returns in the long-term.