Best Investment options 2022: Top 10 investment options in India

However, high-return, low-risk combination in a investment product, unfortunately, does not exist. In reality, risk and returns are directly related, they go hand-in-hand, i.e. the higher the returns, higher the risk and vice versa.

While selecting an investment avenue, you have to match your own risk profile with the associated risks of the product before investing. There are some investments that carry high risk but have the potential to generate higher inflation-adjusted returns than other asset class in the long term while some investments come with low-risk and therefore lower returns.

There are two buckets that investment products fall into and they are financial and non-financial assets. Financial assets can be divided into market-linked products (such as stocks and mutual fund) and fixed income products (like

Here is a look at the 10 investment avenues that Indians can consider when saving for financial goals.

1. Direct equity
Investing in stocks might not be everyone’s cup of tea as it’s a volatile asset class and there is no guarantee of returns. Further, not only is it difficult to pick the right stock, timing your entry and exit is also not easy. The only silver lining is that over long periods, equity has been able to deliver higher than inflation-adjusted returns compared to all other asset classes.

At the same time, the risk of losing a considerable portion or even all of your capital is high unless one opts for stop-loss method to curtail losses. In stop-loss, one places an advance order to sell a stock at a specific price. To reduce the risk to certain extent, you could diversify across sectors and market capitalisations. To directly invest in equity, one needs to open a

Banks also allow opening of a 3-in-1 account. Here’s

2. Equity mutual funds
Equity mutual fund schemes predominantly invest in equity stocks. As per current the Securities and Exchange Board of India (Sebi) Mutual Fund Regulations, an equity mutual fund scheme must invest at least 65 percent of its assets in equity and equity-related instruments. An equity fund can be actively managed or passively managed.

In an actively traded fund, the returns are largely dependent on a fund manager’s ability to generate returns. Index funds and exchange-traded fund (ETFs) are passively managed, and these track the underlying index. Equity schemes are categorised according to market-capitalisation or the sectors in which they invest. They are also categorised by whether they are domestic (investing in stocks of only Indian companies) or international (investing in stocks of overseas companies). Read more about

Debt mutual fund schemes are suitable for investors who want steady returns. They are less volatile and, hence, considered less risky compared to equity funds. Debt mutual funds primarily invest in fixed-interest generating securities like corporate bonds, government securities, treasury bills, commercial paper and other money market instruments.

However, these mutual funds are not risk free. They carry risks such as interest rate risk and credit risk. Therefore, investors should study the related risks before investing. Read more about

4. National Pension System
The National Pension System (NPS) is a long term retirement – focused investment product managed by the Pension Fund Regulatory and Development Authority (PFRDA). The minimum annual (April-March) contribution for an

5. Public Provident Fund (PPF)
Since PPF has a long tenure of 15 years, the impact of compounding of tax-free interest is huge, especially in the later years. Further, since the interest earned and the principal invested is backed by sovereign guarantee, it makes it a safe investment. Remember, interest rate on PPF is reviewed every quarter by the government. Read more about the

6. Bank fixed deposit (FD)
A bank fixed deposit is considered a comparatively safer (than equity or mutual funds) choice for investing in India. Under the deposit insurance and credit guarantee corporation (DICGC) rules, each depositor in a bank is insured up to a maximum of Rs 5 lakh with effect from February 4, 2020 for both principal and interest amount.

Why you need an emergency corpus and where to invest your money to create one

  • ​What is an emergency fund?
  • ​Why is an emergency fund important?
  • ​How big should the fund be?
  • ​Where to park your money?
  • ​The basics: Savings bank account or cash

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​What is an emergency fund?

When it comes to our personal finances, many of us have changed the way we view our money matters. A recent surveil done by Scripbox, a digital wealth director, found that creating an hand brake fund has emerged as the top fiscal finish in the current environment. So what is an emergency fund ? It is a eventuality fund that not only helps financially during most difficult times but besides prevents the derailment of your saving for long terminus goals .

​Why is an emergency fund important?

Simply because emergencies and the ensuing fiscal burden can not be anticipated. In these last couple of years, many of us have seen scratch emergencies, including occupation personnel casualty, pay cuts, death of a kin member and so on thanks to the fresh coronavirus pandemic. Loss of income and medical emergencies can mean that one will have to turn to their emergency fund to tide through the tough times. frankincense, it is important to have an hand brake fund to fight any exigency. An emergency fund is a eventuality fund that not only helps financially during most difficult times, but it besides prevents the derailment of your saving for long term goals .

​How big should the fund be?

An hand brake could be in any form ; a belittled one like car breakdown and a adult one like job loss, which may continue for respective months. In such a situation you will not only have to manage your family expenses but besides continue paying your labilities like EMIs and credit rating circuit board dues. consequently, one should at least build an emergency principal which can at take care of 6-9 months of family expenses .

​Where to park your money?

The primary coil objective of your emergency fund is to help you when you need it the most without any delay. While some emergencies may give you a few hours or days to prepare, others may require funds immediately. Therefore, your emergency principal must be well and promptly accessible in the shape of cash or in the savings bank explanation. A partially of the funds can besides be invested in liquid reciprocal funds that invest merely in money market securities and consequently carry low risk. FDs or RDs can besides be considered. here are some advisable instruments .

​The basics: Savings bank account or cash

One-month expenses as a reservation can be kept in a combination of saving bank history and cash. Though cash is highly discouraged, there are many emergencies when it is the entirely choice. many natural disasters like storm, excessive snowfalls etc. may impact internet connection and so digital payment options may not work. consequently, it may be a good estimate to keep some sum cash to manage 7-10 days expenses. Rest you can keep in your saving bank bill .

Earlier, the coverage was maximum of Rs 1 lakh for both principal and interest amount. As per the need, one may opt for monthly, quarterly, half-yearly, yearly or cumulative interest option in them. The interest rate earned is added to one’s income and is taxed as per one’s income slab. Read more about

Probably the first choice of most retirees, the Senior Citizens’ Saving Scheme is a must-have in their investment portfolios. As the name suggests, only senior citizens or early retirees can invest in this scheme. SCSS can be availed from a post office or a bank by anyone above 60.

SCSS has a five-year tenure, which can be further extended by three years once the scheme matures. The upper investment limit is Rs 15 lakh, and one may open more than one account. The interest rate on SCSS is payable quarterly and is fully taxable. Remember, the interest rate on the scheme is subject to review and revision every quarter.

However, once the investment is made in the scheme, then the interest rate will remain the same till the maturity of the scheme. Senior citizen can claim deduction of up to Rs 50,000 in a financial year under section 80TTB on the interest earned from SCSS. Read more about

8.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)

PMVVY is for senior citizens aged 60 years and above to provide them an assured return of 7.4 per cent per annum. The scheme offers pension income payable monthly, quarterly, half-yearly or yearly as opted. The minimum pension amount is Rs 1,000 per month and maximum Rs 9,250 per month. The maximum amount that can be invested in the scheme Rs 15 lakh. The tenure of the scheme is 10 years. The scheme is available till March 31, 2023. At maturity, the investment amount is repaid to the senior citizen. In the event of death of senior citizen, the money will be paid to the nominee. Read more about

9. Real Estate
The house that you live in is for self-consumption and should never be considered as an investment. If you do not intend to live in it, the second property you buy can be your investment.

The location of the property is the single most important factor that will determine the value of your property and also the rental that it can earn. Investments in real estate deliver returns in two ways – capital appreciation and rentals. However, unlike other asset classes, real estate is highly illiquid. The other big risk is with getting the necessary regulatory approvals, which has largely been addressed after coming of the real estate regulator.

Read more about

10. Gold

Possessing gold in the form of jewellery has its own concerns such as safety and high cost. Then there’s the ‘making charges’, which typically range between 6-14 per cent of the cost of gold (and may go as high as 25 percent in case of special designs). For those who would want to buy gold coins, there’s still an option.

Many banks sell gold coins now-a-days. An alternate way of owning gold is via paper gold. Investment in paper gold is more cost-effective and can be done through gold ETFs. Such investment (buying and selling) happens on a stock exchange (NSE or BSE) with gold as the underlying asset. Investing in

RBI Taxable Bonds

Earlier, RBI used to issue 7.75% Savings (Taxable) Bonds as an investment option. However, the central bank has stopped issuing these bonds with effect from May 29, 2020. These bonds were launched by replacing the erstwhile 8% Savings (Taxable) Bonds 2003 with the 7.75 per cent Savings (Taxable) Bonds with effect from January 10, 2018. These bonds had tenure of 7 years.

The Central Bank with effect from July 1, 2020 has launched Floating Rate Savings Bond, 2020 (Taxable). The biggest difference between earlier 7.75% savings bonds and the newly launched floating rate bond is that the interest rate on the newly launched savings bond is subject to reset in every six months. In the 7.75% bonds, the interest rate was fixed for the entire duration of the investment. Currently, the bonds are offering interest rate of 7.15%. Read more about

What you should do
Some of the above investments are fixed-income while others are financial market-linked. Fixed income and market-linked investments have a role to play in the process of wealth creation. Market-linked investments offer the potential of high returns but also carry high risks. Fixed income investments help in preserving the accumulated wealth so as to meet the desired goal. For long-term goals, it’s important to make the best use of both worlds. Have a judicious mix of investments keeping risk, taxation and time horizon in mind.

(With inputs from Preeti Motiani)
Most investors want to make investments in such a way that they get sky-high returns angstrom promptly as possible without the risk of losing principal money. This is the reason why many are always on the lookout for circus tent investment plans where they can double their money in few months or years with small or no risk.However, high-return, low-risk combination in a investing product, unfortunately, does not exist. In world, risk and returns are directly related, they go hand-in-hand, i.e. the higher the returns, higher the risk and frailty versa.While selecting an investment avenue, you have to match your own risk profile with the associate risks of the product before investing. There are some investments that carry high risk but have the potential to generate higher inflation-adjusted returns than other asset class in the long term while some investments come with low-risk and therefore lower returns.There are two buckets that investment products fall into and they are fiscal and non-financial assets. fiscal assets can be divided into market-linked products ( such as stocks and reciprocal investment company ) and repair income products ( like Public Provident Fund, bank fixed deposits ). Non-financial assets – many Indians invest via this manner – are the likes of forcible amber and substantial estate here is a attend at the 10 investment avenues that Indians can consider when saving for fiscal goals.Investing in stocks might not be everyone ‘s cup of tea as it ‘s a explosive asset class and there is no undertake of returns. Further, not entirely is it difficult to pick the right breed, timing your entry and die is besides not easy. The entirely flatware lining is that over long periods, equity has been able to deliver higher than inflation-adjusted returns compared to all other asset classes.At the same time, the gamble of losing a considerable fortune or even all of your capital is high gear unless one choose for stop-loss method acting to curtail losses. In stop-loss, one places an progress ordain to sell a stock at a specific price. To reduce the hazard to certain extent, you could diversify across sectors and grocery store capitalisations. To immediately invest in equity, one needs to open a demat account. Banks besides allow opening of a 3-in-1 account. here ‘s how you can open one to invest in shares Equity reciprocal fund schemes predominantly invest in fairness stocks. As per stream the Securities and Exchange Board of India ( Sebi ) Mutual Fund Regulations, an fairness reciprocal investment company dodge must invest at least 65 percentage of its assets in fairness and equity-related instruments. An equity fund can be actively managed or passively managed.In an actively traded fund, the returns are largely dependant on a store coach ‘s ability to generate returns. index funds and exchange-traded investment company ( ETFs ) are passively managed, and these track the fundamental index. Equity schemes are categorised according to market-capitalisation or the sectors in which they invest. They are besides categorised by whether they are domestic ( investing in stocks of only indian companies ) or external ( investing in stocks of oversea companies ). Read more about fairness reciprocal funds Debt reciprocal investment company schemes are suitable for investors who want steady returns. They are less volatile and, therefore, considered less hazardous compared to equity funds. Debt common funds chiefly invest in fixed-interest generating securities like bodied bonds, government securities, treasury bills, commercial newspaper and early money market instruments.However, these common funds are not risk free. They carry risks such as interest rate risk and credit gamble. Therefore, investors should study the relate risks before investing. Read more about debt reciprocal funds The National Pension System ( NPS ) is a long term retirement – focus investment product managed by the Pension Fund Regulatory and Development Authority ( PFRDA ). The minimum annual ( April-March ) contribution for an NPS Tier-1 report to remain active has been reduced from Rs 6,000 to Rs 1,000. It is a shuffle of fairness, fixed deposits, bodied bonds, liquid funds and government funds, among others. Based on your risk appetite, you can decide how much of your money can be invested in equities through NPS. Read more about NPS Since PPF has a long tenure of 15 years, the impact of compounding of tax-exempt concern is huge, particularly in the former years. far, since the concern earned and the principal invested is backed by sovereign guarantee, it makes it a condom investment. Remember, concern rate on PPF is reviewed every quarter by the government. Read more about the PPF here.A bank fixed deposit is considered a relatively safe ( than fairness or reciprocal funds ) choice for investing in India. Under the deposit indemnity and credit guarantee corporation ( DICGC ) rules, each depositor in a bank is insured up to a utmost of Rs 5 hundred thousand with consequence from February 4, 2020 for both principal and pastime amount.Earlier, the coverage was utmost of Rs 1 hundred thousand for both principal and interest amount. As per the necessitate, one may opt for monthly, quarterly, semiannual, annual or accumulative interest option in them. The matter to rate earned is added to one ‘s income and is taxed as per one ‘s income slab. Read more about bank fixed deposit probably the first choice of most retirees, the Senior Citizens ‘ Saving Scheme is a must-have in their investment portfolios. As the name suggests, only senior citizens or early retirees can invest in this scheme. SCSS can be availed from a post office or a bank by anyone above 60.SCSS has a five-year tenure, which can be further extended by three years once the scheme matures. The amphetamine investment restrict is Rs 15 hundred thousand, and one may open more than one account. The pastime rate on SCSS is account payable quarterly and is amply taxable. Remember, the matter to rate on the system is subject to review and revision every quarter.However, once the investing is made in the system, then the matter to rate will remain the same cashbox the adulthood of the outline. elder citizen can claim deduction of up to Rs 50,000 in a fiscal year under section 80TTB on the matter to earned from SCSS. Read more about Senior Citizens ‘ Saving Scheme PMVVY is for senior citizens aged 60 years and above to provide them an assured return of 7.4 per cent per annum. The outline offers pension income collectible monthly, quarterly, semiannual or annually as opted. The minimum pension total is Rs 1,000 per calendar month and maximum Rs 9,250 per calendar month. The utmost sum that can be invested in the scheme Rs 15 hundred thousand. The tenure of the outline is 10 years. The schema is available till March 31, 2023. At maturity, the investment amount is repaid to the aged citizen. In the event of death of aged citizen, the money will be paid to the campaigner. Read more about PMVVY The theater that you live in is for self-consumption and should never be considered as an investment. If you do not intend to live in it, the second property you buy can be your investment.The location of the property is the single most significant gene that will determine the rate of your property and besides the lease that it can earn. Investments in real estate deliver returns in two ways – capital appreciation and rentals. however, unlike early asset classes, actual estate of the realm is highly illiquid. The other large risk is with getting the necessity regulative approvals, which has largely been addressed after coming of the real estate of the realm regulator.Read more about actual estate Possessing gold in the form of jewelry has its own concerns such as safety and high monetary value. then there ‘s the ‘making charges ‘, which typically range between 6-14 per cent of the monetary value of gold ( and may go a high as 25 percentage in case of special designs ). For those who would want to buy amber coins, there ‘s even an option.Many banks sell gold coins now-a-days. An understudy direction of owning gold is via newspaper gold. investment in wallpaper gold is more cost-efficient and can be done through gold ETFs. such investment ( buying and selling ) happens on a stock exchange ( NSE or BSE ) with gold as the implicit in asset. Investing in Sovereign Gold Bonds is another choice to own paper-gold. An investor can besides invest via gold reciprocal funds. Read more about autonomous aureate bonds Earlier, RBI used to issue 7.75 % Savings ( taxable ) Bonds as an investment choice. however, the central savings bank has stopped issuing these bonds with effect from May 29, 2020. These bonds were launched by replacing the once 8 % Savings ( taxable ) Bonds 2003 with the 7.75 per cent Savings ( taxable ) Bonds with effect from January 10, 2018. These bonds had tenure of 7 years.The Central Bank with effect from July 1, 2020 has launched Floating Rate Savings Bond, 2020 ( taxable ). The biggest difference between earlier 7.75 % save bonds and the newly launched floating rate bond is that the interest rate on the newly launched savings bond is submit to reset in every six months. In the 7.75 % bonds, the interest rate was fixed for the entire duration of the investment. Currently, the bonds are offering interest rate of 7.15 %. Read more about RBI floating rate bonds Some of the above investments are fixed-income while others are fiscal market-linked. Fixed income and market-linked investments have a role to play in the serve of wealth creation. Market-linked investments offer the electric potential of high returns but besides carry high risks. Fixed income investments help in preserving the roll up wealth so as to meet the desire goal. For long-run goals, it ‘s significant to make the best use of both worlds. Have a judicious blend of investments keeping risk, taxation and time horizon in mind. ( With inputs from Preeti Motiani )

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