Types Of Investment Plans In India

Below mentioned are the types of investment plans available in Indian based on the risk associated with them:

1. Low-Risk Investment Plans: Low risk investment plans provide stable returns on investments with minimum risk involved. This type of investment plan is ideal for investors who are looking for investment options that provide consistent and reliable capital growth with approximately zero risks involved. Below mentioned are some Low-risk investments plans available in India:

• Public Provident Fund (PPF): Public Provident Fund is an investment option offered by the government of India. This scheme was launched with an objective to encourage savings habits among Indians and help them create a retirement corpus.

• Employee Provident Fund (EPF): Employee Provident Fund (EPF) is a savings scheme wherein both the employer and employee qually under this scheme. Both the employer and the employee contribute 12% of the basic salary under this scheme.

• Bonds: Bonds are a type of debt instrument issued by both government and private sector entities, that allows an entity to raise funds to fulfill their capital requirements.

• Life Insurance: Life insurance is a contract between the insurance provider and the life assured, wherein the insurance provider promises to provide a death benefit in case of an unforeseen demise of the life assured during the policy tenure.

• Post Office Monthly Income Schemes: This investment scheme is offered by the Indian Postal Service. It allows the investor to earn substantial returns within a short lock-in period and involves no risk. It is the safest investment option in India.

• Senior Citizen Savings Scheme (SCSS): Senior Citizens Savings Scheme is a fixed income investment option offered by the government of India to help in providing regular income to citizens who have completed or are above 60 years of age.

• Fixed Deposits: Fixed Deposits, commonly

  Nowadays, people invest their savings in different market linked investment options over a period of time to maximize their returns with low risk involved. Reasons to invest your money can be different and depends on your goals. Regardless of the investment option that you choose, the choice of making an investment should be based on your risk tolerance, liquidity needs and investment horizon.

  Investment plans are a type of investment tool which help a person to create a corpus by investing in different funds options over a period of time. There are several types of investment plans available in India. Each investment plan has their own risk profile and potential of returns on investments. On the basis of the risk associated with the investment plan, they can be classified into three categories: Low-risk, Medium-risk and High-risk investment plans.

  referred to as FDs are a type of investment option under which the investor can make a lump sum investment with a fixed rate of interest on investments for a fixed tenure.

2. Medium-Risk Investment Plans: Medium investment plans provide an opportunity to the investor to avail diverse and balanced returns on investments with moderate risk involved. Under this type of investment plans, the investor can diversify their investment portfolio by investing in a blend of equity and debt investments, which helps in generating stable returns with minimum risk associated. Here are some examples of medium-risk investment plans available in India:

• Monthly Income Plans: Monthly Income plans are a type of mutual funds that invest in debt and equities while providing fixed returns to the investors on a monthly basis.

• Hybrid Debt Funds: Under Hybrid Debt Funds, the investments are made under equity and debt investment tools. This investment option offers high returns with moderate risk involved.

• Arbitrage Funds: Arbitrage funds are basically equity funds that invest the money in stocks and equity derivatives. This is a type of fund that aims to buy and sell securities in different markets allowing the investors to avail profit from slight price difference in markets.

3. High-Risk Investment Plans: As the name implies, high-risk investments plans are a type of investment instrument that has high risk involved but also provide high rate of returns on investments in the long run. This type of investment plan is suitable for investors who have a high risk appetite and are willing to invest for a longer period of time. Here are some high-risk investments plans available in India:

• Unit Linked Insurance Plans (ULIPs): Unit-linked insurance plans also known as ULIPs are a lend of life insurance and investment option. Under this plan, part of premiums paid are invested in different market linked fund options and the remaining part of premiums paid are used for life cover.

• Mutual Funds: Mutual funds is a pool of money collected from a number of investors who have a common investment objective. The pool of money is invested in bonds. Money market instruments, equities or other securities and the gain from the collective investment is disbursed proportionately among the investors.

• Direct Equities: Under direct equity the money is invested directly in the stock market. To make the investments under this investment option one must have a demat account with the stockbroker.