From PPF to mutual funds, top 10 investment options that can make you rich
All of us wonder how we can make money without much effort. But only a few follow the winding path towards becoming rich. To become rich, a person needs to have a good financial plan and also learn how to invest.
Once you learn the art and science behind making idle money work for you, you will have a better chance of becoming rich effortlessly. Needless to say, one can become financially stable if they inculcate the habit of investing early on in their life.Read more ↓
The first step towards investing is finding a suitable investment option. The best investment options will help you become financially disciplined as well as independent.
Here is a list of top 10 investment options that can help you become rich;
Stocks or equities are a volatile asset class. Equities come without any guarantees in terms of generating returns. However, equities have performed better than most asset classes over the years because they deliver returns that are inflation-adjusted. To cushion the blow, Individuals can diversify a portfolio by investing in different sectors and companies of different market capitalizations. Those who have a high-risk appetite but want to generate higher returns might prefer to invest in stocks that are high in risk but come with a longer investment horizon. Investment in stocks can be done by opening a Demat account.
At present, mutual funds are considered to be one of the best investment options to make money. Mutual Funds allow investors to choose from a variety of options with varying risk levels. With mutual fund investment plans investors also have the opportunity to diversify their portfolio even with a small amount of money. Mutual Funds give many avenues of investments with varied risk and returns. Keep in mind that risks and returns are directly proportional to each other. But with greater diversification, there is a lowering of risk. We can easily conclude that mutual fund investment is incomparable in creating a substantial corpus or a long-term investment.
Post Office Monthly Income Scheme (POMIS)
The POMIS is regarded to be a good investment option for an individual who wishes to create a steady income at a fixed rate. The scheme comes with a lock-in period of 5 years. It has a low-risk profile and compounds interest at the rate of 7.6%. These benefits make it an ideal investment option for conservative investors. Individuals can invest any amount between Rs. 1,500 to Rs. 4,50,000 in one account. In a joint holding account, it is possible to invest up to Rs. 9,00,000.
National Pension System (NPS)
The National Pension Scheme is managed by the Pension Fund Regulatory and Development Authority (PFRDA). It is a solution-oriented investment scheme aimed at retirement. It offers a mix of fixed deposits, equity, corporate bonds, government funds, and liquid funds. Because it is a government-sponsored scheme, NPS is regarded as a safe investment option. Individuals can decide the amount of money they want to invest in this scheme based on their risk appetite. Apart from that, individuals can avail of tax benefits up to Rs. 1.5 Lakh on their investment in this scheme.
Public Provident Fund (PPF)
PPF remains one of the most popular ways of investing money. Individuals can easily open a PPF account in post offices and banks. It is possible to open a PPF account online also. It gives you the opportunity to invest as low as Rs. 500. The scheme comes with a tenure of 15 years, with a benefit of compounding their earnings. On completion of 15 years, there is an option of extending by another five years.
Individuals who put their money in the PPF scheme are also entitled to tax deductions. The scheme has an interest rate of 7.9%. The interest generated through this is exempt from taxes, which makes it one of the most sought after schemes among many.
Bank Fixed Deposit (FD)
Bank fixed deposits have always been the go-to option for people who prefer low risk. A fixed deposit in a bank is considered to be the safest option of investment. It is the low-risk investment feature with the option to earn a rate of 6%-8% interest on the deposit. They are entitled to tax deductions on their deposit under Section 80C of the Income Tax Act. However, as there is nothing that comes without risk, the lower returns of FD is slightly unappealing for investors when compared to schemes like debt funds.