 "Where to invest money in India? Top 5 investment options in 2024")
The world is going through a tough time, and the impact of inflation can potentially lead you to a more severe situation. India has currently managed to prevent inflation impact in the country. Still, prevention is always better than cure.
There are some investment options that you can make to shield yourself from any impact of inflation or financial instability. There are chances that the growing number of investment trends could help you prepare for a potential recession and hedging daily utility goods, such as gas, crude oil, electricity supply, etc. If you want to avoid all this and are looking for the answer to where to invest money in India, then this article is for you.
Top 10 Investment Options in 2024
Government Bonds
The Indian government has started the direct purchase of bonds for individual investors, which could earlier be traded in government bonds through gilt mutual funds to encourage domestic participation.
Availability: The government announces the date of auction for its bond offering. The state government issues State Development Loans, while the central government issues G-Secs or government bonds. You need to have a bank account to buy such bonds, or you can also hold them in your demat account.
Investment amount: The government reveals the price of bonds at the time of offering. You can also participate through commercial banks listed by the government. You should have a securities account for this.
Return on Investment (ROI): Most of the government bonds are fixed-rate bonds. However, some of the interest is determined at the time of purchase.
More From This Section
Maturity: The maturity of the bond can be a year or more, depending on the offering.
Public Provident Fund (PPF)
This is one of the safety investment plans, which are free from risks and offer guaranteed returns.
Availability: This option is available in almost all the banks and post offices without any age limit. However, the minor's account will be managed by the guardian till the age of 18.
Investment Amount: A user can invest from Rs 500 to Rs 1.5 lakh per annum. He can deposit from 1 to 12 times a year.
Return on Investment: The current interest rate on PPF is around 7.10 per cent. However, the interest rates fluctuate every quarter.
Maturity: Generally, the maturing period is around 15 years, and the user can also withdraw the partial amount after five years. Both investment and interest on investment are tax-free.
Post Office Monthly Income Scheme
This is one of the most popular interest schemes in domestic households, especially among housewives and individuals earning passive income and aiming for some returns.
Availability: The Indian postal service offers this service to single accounts, joint accounts, and minor accounts with guardians.
Investment: A minimum of Rs 1000 is required to open the joint account, while a maximum of Rs 4.50 lakh and Rs 9 lakh are required for single and joint accounts, respectively.
Maturity: The account can be closed after five years from the date of its opening. However, premature closure is also allowed with a 2 per cent deduction between one to three years and 1 per cent from four to five years.
ROI: The scheme pays 6.60 per cent per annum, which is paid monthly. Interest earned from the deposit is taxable.
Sovereign Gold Bonds (SGBs)
Sovereign Gold Bonds (SGB) are the securities issued by the Reserve Bank of India. These are issued in multiples of gram(s) of gold with a minimum investment of 1 gram.
Availability: SGBs are available for auction from the date announced by the central government. These bonds are issued by the RBI multiple times a year. One can buy these bonds either online or offline from banks, post offices, or stock brokerage.
Investment: Each unit has the value of one gram of pure gold which is based on the average closing price of gold's previous three business days. A person can buy a maximum of 4 kgs of SGBs for individuals and 20 kgs for trusts. Currently, the investment amount is available at a discount of Rs 50 each.
Maturity: The maturity period of SGBs is eight years. Early redemption is also available after five years.
ROI: The return on Investment of SGBs is 2.5 per cent, paid twice a year. The interest earned is taxable under your tax slab. However, no tax on gain earned on maturity.
Equity Mutual Funds
An equity mutual fund is a way to invest your money in diverse stocks to generate good returns.
Availability: One can invest in Equity Mutual Funds with the help of SEBI-authorised individuals, agencies, brokers or applications online or offline.
Investment: Most of the mutual funds expect a minimum investment of Rs 1000. There is no restriction on the maximum amount. To invest in equity mutual funds, you need a demat and a trading account.
Maturity: Investors can redeem their investments in open-ended mutual fund schemes. If the equity is linked with saving schemes under the equity mutual fund umbrella, a lock-in period of three years from the date you exit investment.
ROI: Equity mutual funds generally offer more interest as compared to other types of mutual funds. The returns are highly dependent on market fluctuations and overall economic scenarios. In short-term capital gain, tax at 15 per cent is applied with a 5 per cent cess. If the long-term capital gain is less than 1 lakh, then it is tax-free. Otherwise, the amount is taxable at the rate of 10 per cent plus 4 per cent cess.