Investment Plans

When you see that you are earning more than what you spend, this is the right time to start your investment and increase your savings manyfold. Investment increases the value of your hard-earned money over time, but selecting the best investment plans is also important. The main purpose of the investment plan is to earn profit via different Investment tools. Investment planning becomes crucial if one wants to increase the possibility of profit. 

There are several options through which you can make the best investment in India and these options are: -investment in share market, investments in the fixed deposit can invest in mutual funds, etc. 

The investment plan that you choose depends on the goal of your investments, which means your need to invest money. Other factors over which your investment plan depends are liquidity needs, amount of risk, and investment horizon. Out of these above-mentioned factors, the amount of risk is the most important factor to look upon in today’s time.

When it comes to an investment plan, so many questions arise in people’s minds like why is an investment plan important? How do I start investing? etc. We will discuss everything here.

Best Investment plans in India 2021

There are numerous investment plans in India offered by different financial organizations. The 10 best investment plans are mentioned in the table ahead- 

Investment Plan	Type of Plan	Entry Age	Maturity age (Maximum)	Policy Term	Fund Options
Aegon invest	ULIP	7 – 55 years	70 years	10 Years 15 years  20 years  25 years	5
Bajaj Future Gain	ULIP	60 years	70 years	10 – 25 years	7
Bharti AXA eFuture Invest	ULIP	18 – 60 years	70 years	10 years	6
Canara HSBC Smart Monthly Income Plan	ULIP	18-50 years	–	5 – 30 years	7
EdelweissTokio Guaranteed IncomePlan	ULIP	0-60 years	70 years	5-25 years	7
Exide Life Wealth Maxima	ULIP	0-65 years	75 years	10 Years 15 Years 20 Years	6
Future Generali Easy Invest Online Plan	ULIP	0-60 years	18-70 year	10-20 years	5
HDFC Life Click2invest	ULIP	30 days – 65 years	75 years	5 – 20 years	8
HDFC SL YoungStar Super Premium	Unit-Linked child plan	18 – 55/65 years	65/75 years	10 – 20 years	4
ICICI Pru Smart Life	ULIP	20-54 years	20-64 years	10 – 25 years	8

Types of Investment plan in India 

There are various examples of investment plans available in India, to help you out here are some options mentioned below which can lead you to make the best investment in India. 

There are investment tools which are the best investment plans for 1-year, best investment plans for 2 years, and also best investment plans for 5 years. Some of the investment options are explained in this article ahead-

• Unit Linked Investment Plans 
• Public Provident Fund 
• Monthly Income plan
• Sukanya Samriddhi Yojana 
• Tax Saving deposit scheme
• Mutual Funds
• Senior Citizens savings scheme

There are three types of investment options available in India namely the Low-risk investment option, the High-risk Investment option, Medium-risk Investment plan. 

Low-Risk Investment option 

Low-risk investment means there are low chances of financial loss. These investment plans are ideal for people who do not want to take any financial risk while looking for profit. 

• Senior Citizens Saving Scheme (Government Scheme)

The senior citizen saving scheme is an ideal investment option for retired personnel. You can activate this scheme via an Indian bank or Post office. The minimum age required to apply for this scheme is 60 years. You can open more than more accounts under this government scheme. The upper cap for the investment under this scheme is INR 15 lakh. 

Tax is applicable for this scheme and the interest rate does not change until the scheme matures.  You can also claim INR 50,000 under claim deduction. 

• Public Provident Fund

Public Provident Fund is one of the best investments in India and also this is a very common and trusted investment type. According to this government scheme, people save some of the amounts of their monthly income and when they retire, they can have access to this saved money. 

We can say that this is the best investment plan for 5 years but it works for a longer period. This plan is best for the people who work on a salary basis. This investment does not charge taxes on interest. 

In PPF, Principal Investment is backed by the sovereign guarantee thus making it an ideal investment choice for the salaried people. The interest rate under this scheme is reviewed by the government every quarter. 

• Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana is a government scheme launched especially for the girl child. You can secure the future of your daughter with the help of this investment scheme. You can gain assured returns with low risk.

 This scheme has a tenure of 21 years and remains active until the marriage of the girl. The interest rate under this government scheme is 7.6%. The compound interest benefits are also applicable under this scheme. This government scheme is tax exempted under the Income-tax act 1961. 

• Fixed deposit

FDs are one of the most preferred investment choices of the Indian population due to their low risk and assured returns. Under the instruction of DGIC, a depositor can get insurance up to INR 5 Lakh (Principal amount + Interest). The tenure under this scheme can be changed according to the suitability of the scheme holder. Interest rate is provided on a monthly, quarterly, or yearly basis. The amount earned via interest is taxable. 

• National Pension Scheme

This investment scheme is ideal for people who want to have a regular income after retirement. Pension fund regulatory and development authority regulates this scheme. You can pay a nominal amount of INR 1000 per year to keep your Tier-1 account active. Earlier this amount was INR 6000. 

NPS is a combination of liquid funds, government funds, FDs, Corporate Bonds, etc. As an investor, you have a choice to invest in NIP according to your risk appetite. 

• Pradhan Mantri Vaya Vandan Yojana 

This government scheme primarily focuses on senior citizens who are 60 years old and above. Under this scheme, you get an assured return of 7.4% per year. Under this scheme, you can get pension income on a yearly, half-yearly, quarterly, and monthly basis. 

The scheme holder receives a pension of INR 1000- INR 9,250. There is an upper cap of INR 15 lakh under this scheme and the tenure is 10 years. You receive the invested money at the time of maturity of the scheme. Under this investment scheme, you can also add a nominee/beneficiary. One can enroll in this scheme till March 31, 2021. 

• Gold

Gold Investments are becoming popular in India due to their interest and expenses. Making charges are applicable in this investment. These charges are reviewed and extended around 6-14% of the Gold Price. The price can increase significantly and can go up to 25% or more. 

Investors and individuals can purchase gold coins from banks. One can also claim gold via Paper gold employment. The interest rate under Paper gold is practical, you can avail the benefits under Gold EFTs. You can sell these assets on BSE/NSE. One can also go for gold bonds (sovereign) to claim paper gold or can invest in mutual funds (Gold).

• RBI Taxable Bonds 

In Past, the RBI used to provide 7.75 % of taxable savings bonds. However, RBI has stopped providing such savings bonds from 29 May 2020 onwards. There is a difference between the two rate securities. The latest security rate is to be reset periodically

High-Risk Investment option 

The high-risk investment plans are explained in this article ahead. 

• Equity Mutual Funds

Under this investment option, the investment is done via equity stocks. Under SEBI guidelines, an investor must own 60 % of assets of Equity or equity-related investment tools. You can manage equity mutual funds actively and passively. 

Under the active equity mutual fund, the returns of the traded fund depend on the fund manager’s capacity to generate profit. You can segregate your equity mutual funds based on Market capitalization or investment goals. With Equity Mutual Funds, you can invest in domestic companies or international companies.

• Debt Mutual Funds

Debt Mutual funds are more stable than equity mutual funds. If you want a steady return then debt mutual funds are ideal for you. You can generate a fixed profit via debt mutual funds. The fund is invested in securities like Corporate Bonds, treasury bills, government securities, commercial paper, etc.

However, this does not guarantee a low risk for this investment tool. Certain risks come with debt mutual funds such as interest risk or credit risk. 

• Direct Equity 

Under direct Equity, the investor has to invest in stocks. The returns depend on the quality of the stock. It needs proper investment planning and aspects like ten timing. However, this is one of the most profitable investment assets in comparison to other long-term investment tools. There are lower chances of financial loss until the investor selects for a stop-loss method. 

You can also go for diverse sectors and market capitalization under direct equity. You can also purchase shares of a company. you will be able to grow your money as the company grows and whenever you feel like your share value has reached a certain level which you feel is satisfied, you can easily sell that share

Investment in stocks and share market can be very fruitful if you are investing in a reliable company and also you become quite smart about your investments

• Unit- Linked Insurance Plan

ULPs offer an investment and Life insurance facility to the investor. ULPs are quite popular in India due to their insurance coverage with additional benefits. Investors can also choose the assets they want to invest in. With the help of ULPs, you can invest your money in different funds. ULP investments depend on the fund value and premiums of the insurance policy. 

Presently, 4G ULPs provide flexibility to the investors. The cost is also low for 4G ULPs. ULPs have been made tax-free under the union budget 2018, making them popular among investors. These ULPs can be considered as a combination of investment and coverage. In this investment tool, you can also invest directly in other investment assets thus, providing financial profit and life insurance coverage to the investor. 

Medium Risk Investment Option

Moderate Risk investment provides a balanced investment option to investors. You can also choose different investment options under these moderate-risk investment tools. These are stable and provide security against Market fluctuation. 

You can diversify your investment portfolio with the help of these medium-risk investments. A steady return is assured as the investment is done as a mixture of equity and debt securities. Some of the moderate risk investment plans are – 

• Monthly Income scheme 
• Arbitrage Fund 
• Hybrid Debt Oriented funds

Investment plans: Benefits 

Investment is the best way to earn profit. There are many more benefits of investment plans, some of them are mentioned below- 

• Protect your loved ones

ULPs provides life insurance coverage with a facility to invest and earn profit. It means you can make the financial security strong for your family. Under this type of investment, the family of the investor gets the assured sum with additional benefits after him. 

• Goal-based investment planning

While investing, make sure you have an investment goal. From buying a new house to a new car or providing for the educational expenses of your children, you need to make sure what plans suit you more. 

• Wealth generation 

The main purpose of the investment is capital generation. With the help of investment tools, you can gain high returns. 

• Tax benefits 

There are many government-backed and other investment schemes that offer tax exemption under the Income-tax act. 

• Flexibility 

If you want to invest in different investment tools, you can do so with the help of different investment plans that meet your needs. 

Objectives of Investment Plans

The objectives for investment can be different for different investors, here are some of the common investment objectives – 

• Safety

Safety is one of the reasons that make people go for an investment plan. There are many investment policies like ULPs that offer an assured return to the investors. 

• Income 

Investments offer a high profit to the investors. The main reason for investing in different investment tools is to earn higher profits. 

• Tax Exemption/ Minimization 

Investors invest in different investment tools to minimize their income tax. You can save tax with the help of an investment plan under section 10 and section 80 of the Income-tax act. 

How to choose an investment plan?

Before investment, you should note these important points. Investment is a risky venture which can cause you financial loss. This is why it is important to keep these points in view- 

1. Reach your financial goals 
2. Create a perfect investment plan alongside insurance policies
3. Assess your investment period to reach your financial goals
4. Carefully check the charges applied on investment plans
5. Have a diverse portfolio for financial backup 
6. Keep a track of your investment plan.

Things to check before choosing investment plans

Investors should keep some important factors in mind before investing- 

• Goals 

Make sure how much you want to earn from your investment. It can be anything, buying a car, house, getting married, or creating a corpus balance. You can afford a short-term trip with the help of your investment plans. 

• Future Expenses and Savings

You have to be clear about your expenses and savings while investing. Your expenses decide how much you can save and meet your financial goals. 

• Major Possible expenses 

While investing, you should keep in mind your future expenses. Some of the major spendings like house purchases can easily be covered by your ULPs/ endowment plans. You can consider the large expenses that may occur in the future like marriage or education-related expenditure. 

• Insurance Coverage: Existing vs required

While investing, make sure you consider your requirements and needs. You should calculate which investment plan caters to your needs. You should also see if the investment plan you are investing in can offer you financial backup in times of uncertainty. 

• Number of family members

Before investing in an investment plan, you should consider your family members. If you have a small family then its need would be less in comparison to big or joint families. You should go for an investment plan according to the needs of your family members. 

Investment Plans: Required Documents 

Here is the list of documents that you will require while going for an investment plan in India-

Income Proof		Address Proof	Age Proof	Identity Proof
Salaried person	Self-employed	Voter ID	Pan Card	Aadhar Card
Form 16 of the latest year	Form 26 AS	Aadhar Card	Aadhar Card	Pan Card
Bank statement of last three months (salary credit)	Income calculation and Income tax returns	Passport	Passport	Voter ID
Income Tax returns (last 2 years)	In case of unavailability of income tax computation, ITR of 3 recent years	NPR (Name, address, Aadhar Number)	Municipal	Passport
	CA, Profit-loss account	Any other document issued by the central government	Voter ID

Why should you Invest? 

The growing inflation and cost of quality services are increasing with time.  To sail through a financial emergency and accumulate capital, investment becomes a necessary tool. 

Investment is a way to control your financial conditions. Investment plans should be selected as per your needs and life goals. 

When to invest?

When we invest, we have some goals and plans. It is important to make financial goals clear in our minds. Before going for an investment plan, you should check how long you can invest in a specific investment plan. 

Presently, there are many reasons for us to look for alternative methods for capital generation. These financial goals can not be fulfilled by the savings of salaried people. For gaining financial security, Investment is an important tool. 

Make sure you set a time for your investment plan, have a thorough investment plan to sail through the financial crisis. Your age and risk appetite also matter while investing. Make sure you stick to the investment plan. 

Investment plans – FAQs 

Q1. How much risk is there in investment in share market policies? 

Ans. Investment does not come without risk. However, many government schemes offer decent returns at low risk.

Q2. Why is investment important? 

Ans. Investment is important to increase the value of your money and for that money to help you in the future as to make you financially stable. 

Q3. Are the best investment plans for 1 year better or the best investment plans for 2 years? 

Ans. It depends on your priorities and your preference on the type you are interested in. you should check how much and for how long you can invest.

Q4. What are the high-risk investment plans? 

Ans. The high-risk investment plans have a higher possibility of financial loss. A perfect investment plan provides desirable returns to the investor.

Q5. Is an investment plan necessary for investors?

Ans. Yes, investment plans are like the backbone of an investor. With the help of an investment plan, investors can manage the financial loss without getting caught in emotions.