Long-Term Investments Plans In India
Updated On Nov 24, 2021
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Long-term investments provide superior returns when they reach maturity. This type of investment is ideal for your child because it allows you to plan financially for his/her future - education, marriage, and lifestyle. There are several long-term investment options available, and you must carefully select one based on your financial objectives and the risk factors associated with investment plans in India.
Long term investing is so named for a reason: you invest and then forget about the money until it matures. Keep a regular record of your savings so you know where your money is going. Here are some long-term investment possibilities for you:
Best Long Term Investment Options of 2021
Following are the best investment options available in India in 2021
1. Public Provident Fund (PPF)
The Public Provident Fund, one of the most popular investment options in the country, has an interest rate of 8.7 percent and is still the best bet. It qualifies for tax breaks under Section 80C, and interest income is exempt from income taxes (is exempted from tax.).
PPF is especially useful for people who have a low risk tolerance and want to save money for retirement or another long-term financial goal. Investors with higher risk tolerances can also invest in it to diversify their portfolio.
2. Equity Funds
Long-term investors should invest in mutual funds that invest in stock markets. These long-term investment ideas diversify across equities and sectors to take advantage of new stock market developments.
Choose equity funds that are well-managed and well-diversified, and have a lengthy track record of outperforming market cycles. If you invest in the fund with a five-year perspective, you'll have a better chance of making a long-term profit.
If you want to save money on taxes, invest in tax-saving mutual funds, often known as ELSS or equity-linked savings schemes. These mutual funds operate similarly to traditional equity funds, with the exception that they have a three-year lock-in period.
3. Unit Linked Insurance Plans(ULIP)
Unit-linked insurance plans, or ULIPs, invest in debt and equity markets. The net asset value can be used to track the ups and downs of the market (NAV). Although most people do not recommend ULIPs because of the various charges, they can provide a decent return of 8% on long-term investments.
Unit-linked insurance plans, or ULIPs, invest in asset markets such as equities and debt. As a result, their portfolio experiences ups and downs, which are captured by the net asset value (NAV), which is usually published at regular intervals. All ULIP purchases and redemptions are subject to the NAV plus any applicable load.
4. Mutual Funds
These are for investors who want to balance risk and return by investing in bonds and equities. Depending on one's risk tolerance, there are various types of funds in which one can invest. Alternatively, you can choose a Systematic Investment Plan (SIP), which reduces market risk by constructing a portfolio over a longer period of time with small investments at regular intervals.
5. National Pension Scheme (NPS)
This scheme is for those who want to build a strong retirement fund by putting their money into a government-managed pension fund that invests in diversified stock market portfolios such as government bonds, corporate debentures, and shares. The returns or accumulated pension wealth from such investments are used to purchase a life annuity, with a portion of the proceeds available for withdrawal at the end of the scheme cycle.
Having invested your money in financial products that may generate a return carries its own set of risks. It is prudent to thoroughly research the potential risks associated with the product in question before making an investment.
You may also like to read - Differences Between EPF VPF And PPF
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.