Best Way to Invest 1 Lakh in India

Investment is important for everyone to secure their future financially and to make a financial repository to meet future needs. Different types of investment options are available in the market currently, but here we will talk about the best options to invest INR 1 Lakh in India to get better returns. 

Every individual investor has different financial goals and objectives which they want to achieve from their investment, and from this article, they can choose their best option for investing and put their money to use in order to get better returns

Top Investment Options for Investing Rs 1 Lakh

1. Fixed Deposit

Fixed Deposits are the most popular and one of the safest investment types in India. Most people in India choose to invest their hard-earned money in this investment option because there is also an option for regular income.

• In fixed deposits interest rate is fixed which is given at the time of account opening and the investor will get interest on the investment made by them which will be monthly, quarterly or annually.

• The date of maturity is fixed in this investment.

• It is one of the safest investment options with low risk and steady return.

• People who are residents of India, NRIs, and minors under their guardians are eligible for this investment.

• Before investing, compare the interest rates of different banks, premature closure penalties, and tax that will be implied on interest earned from the investments.
  

2. Money Market Account

Money Market Account is a type of account which is offered by banks and credit unions. It is a great choice for investors who want a great return on their investment in a short time. It is also a safe investment for one who is seeking a safe and secure investment option.

• Interest rates are higher than other savings accounts.

• Transactions are limited in MMA.

• It is a safer option for investment to attain short-term goals and gives the best return compared to other savings accounts.

• People who are residents of India with valid KYC are eligible for this investment.

• Always check and go through the accounts with higher interest rates and lower fees. Check the transaction limits to avoid penalties.

3. Post-Office Time Deposits

Post-Office Time Deposit is an investment option given by the Government of India in which investors can invest their money for a period of 1 year to 5 years and earn interest on it.

• The interest rate is better than other investments and starts from 6.9% in 1st year and 7.5% in 5th year of investment.

• It is the safe and secure investment provided by the Post Office and it is backed by the Government of India.

• People who are residents of India and minors aged 10 and above are eligible for this investment.

• Always check the interest rate and compare it with other plans and keep this investment for the long term because interest rates increase every year in this investment.

4. Recurring Deposits

Recurring Deposits are an investment product which is provided by the bank and post office in India. In this investment, money is deposited every month and interest is earned on it for a fixed period. It is the safest option for investment for a person who is seeking no risk in investment.

• One has to deposit money every month for a fixed tenure of 5 years which can be extended for 5 more years. One can close an account at any time during the extended period.

• It comes with a facility of monthly deposit which is suitable for regular-income people who want to invest their money.

• It is available for people who are residents of India, guardians on behalf of minors and minors above the age of 10.

• Compare interest rates of different banks and post offices before investing your money. Be consistent with your deposits to avoid penalties.

5. Corporate Deposits

Corporate Deposits are also known as corporate fixed deposits and this is provided by Non-banking financial companies. In this investment, one has to invest money in different companies' FDs and interest is earned on it. Corporate Deposits are an option for those looking to diversify their fixed-income investments and willing to take a slightly higher risk for potentially better returns.

• The interest rate is higher compared to bank FDs. The return on this investment is higher compared to other plans.

• Risk is high in this investment because it is provided by non-banking financial companies and an investor can lose his money if the company faces financial loss.

• It is available for people who are residents of India, NRIs, and others according to the terms and conditions of the company.

• Before investing in Corporate Deposits do not forget to go through the credit rating of the company. Always invest your small amount of money to minimize the risk of loss. 

Things to Keep in Mind While Investing 1 Lakh

Investing Rupees 1 Lakh in any plan or scheme is a very crucial decision to take because there are different kinds of things to keep in mind while investing so here are some points to keep in mind:

• Make your financial goal for your investment which will let you know what you have to achieve from this investment.

• Calculate your risk and invest accordingly to know your risk tolerance capacity. It is also done to know how much you are ready to sustain in conditions of market fluctuation or any circumstances that occur in future.

• Do not keep all your funds in one plan, scheme or investment always try to keep your investment diversified which will help in reducing the risk and increase the return on investment.

• Go through different investment options and compare all of them on different parameters like rate of interest, risks, tax benefits etc.

• Before investing read the premature closure terms and conditions.

• Keep an eye on market trends and economic factors because they can impact your investment.

• Consult with financial advisors and stay in touch with them before investing in any type of investment.

Conclusion

For any individual investment of 1 Lakh is a very crucial decision which needs a lot of guidance and information before investing. There are different kinds of investment options like fixed deposits, money market accounts, post-office time deposits, recurring deposits, and corporate deposits. Some give high rates of interest with high risks while some give low risks with low interest rates but are safe options to go with. There are certain things one should keep in mind while investing like risks, return on investment and tax benefits.

FAQs

Q. Where to invest in India in 2024?

A. In 2024 if someone is looking for an investment option to invest their money they can invest in FDs, corporate deposits and recurring deposits.

Q. Where to invest if I have 1 lakh?

A. If you have 1 Lakh you can invest in corporate deposits, money market accounts, fixed deposits and recurring deposits. Among all these fixed deposits and recurring deposits are the safe option for investment.

Q. Which investment is best for next 5 years?

A. Bank and post office deposits are the best investment for the next 5 years because they are safe and offer a good return on investment.

Q. What is the safest investment with highest return in India?

A. Fixed deposits and recurring deposits are the safest investments with the highest return in India.