The simplest way of starting investing is through a professional manager in mutual funds. Investment plans come in all sizes and shapes; you may invest, as the avenues are many.
Best Long-term Investment Plans
Financial goals for 7-10 years are long-term goals, and a few are:
- Equity mutual funds– It allows to reduce risk and diversify invested capital. The mutual funds invest to diversify investments across multiple stocks in different sizes from different sectors.
- Real estate– The investments in real estate are promising and come with their risks. It may include property selling quickly or selling for a huge discount, causing a loss. Investing in Real estate mutual funds is one of the money market mutual funds.
- Gold– Gold does not give the highest returns among long-term investments. However, it is an effective hedge against equity fluctuation or inflation.
- Small saving schemes– The Indian government has numerous small saving schemes such as Public Provident Fund. It offers steady returns, may be relatively low and beats the inflation effects.
- NPS– A long-term investment is the National Pension system focusing on retirement funds. It combines equities, and corporate and government bonds.
- ULIPs– A ULIP is an insurance plan presenting a combination of life insurance and investment. A good investment in equity or bonds helps garner returns, and the rest is for insurance cover.
Best Medium Term Investment Plans
Medium-term goals are 3-5 years away. Medium-term goals are a good saving type as cash management accounts. It is appropriate for your wedding, house renovation, downpayment, etc. Medium-term investment options beat inflation by a decent margin. Some investment options are:
- National Savings Certificates (NSC) – It is a post office saving for a 5-year FD. Earn 6.8% interest annually and the amount is receivable at maturity only. NSC is the safer option for investment.
- Post Office Time Deposit– Post offices, as if banks offer FDs. This is an investment option to deposit money for the short and medium-term. They offer better returns, and without any additional risk, these schemes are safe to run by the Indian government.
- Debt Funds for Medium Term– The debt fund categories depend on picking the appropriate debt fund. Banking& PSU Fund, Short Duration Fund, and Corporate Bond Fund are debt mutual fund categories fitting as medium-term goals. They are the money market accounts.
- Hybrid Funds- The investment in mutual funds is a popular combination of asset classes. The Hybrid Funds invest in Real estate or Gold. The benefit is to enjoy the potential of equity and stability in one fund.
Best Short-Term Investment Options
The short-term investment plans rely on two aspects:
- Minimize the risk to invested capital
- Your investments should be accessible easily
Bank Fixed Deposits (FDs) – it is a popular investment option assuring returns. The FDs are the safest options as there are no negative earning returns to erode your wealth. Withdrawing before maturity has a penalty to pay.
Debt Funds For Short-Term- The 3 debt fund categories are money market mutual fund, liquid fund, and ultra-short duration fund. These are low-risk products and are better for FDs.
Wrapping up
Planning to invest includes concentration on easy accessibility and risk minimization investments. They are crucial factors to bear in mind with investment plans. A deposit to a certain amount assures returns of maturity on the principal investment and it is on maturity you receive it.
