There are many different types of investment options, depending upon your investment approach you will have both long term and short-term investment, investment that may yield you more in a short span but with additional risks and classic investment options which gives you decent returns over time and are a safer bet.
We have listed down different types of investment option in the market available for you to choose from.
Stocks
Lately stock investment is not limited to the elite few in the Dalal Street; and part of its popularity is owed to its high returns. Purchasing stocks and shares entitles investors to a portion of the company’s ownership. Stocks are purchased with the goal of generating regular income in the form of dividends as well as capital growth. They are a high-risk investment.
Fixed Deposits (FDs)
One of the most classic and trusted investment option is with banks and financial organisations that provide Fixed Deposits. The interest on this investment ranges from 3 to 7 percent and can be for a period ranging between 7 days to 10 years. This is a low risk investment option where you will get guaranteed returns.
Bonds
Bonds may be issued by the Government or a corporation and is considered a debt investment. It is a type of low risk investment in which the issuer is obligated to pay interest on the principal amount.
Real Estate
Real Estate investments have grown in the recent times. This involves buying a commercial or residential property and earn returns in terms of rent or lease or in way of holding them off to sell at a higher rate in a later stage.
Public Provident Fund (PPF)
Public Provident Fund are another investment type that has a lot of popularity amongst investors both seasoned and beginners. PPF works on the power of compounding and since the interest rate is revised in every quarter the returns on PPF is great.
Mutual Funds
One of the most popular investment option is Mutual fund investments. They are financial instruments that is invested a variety of assets, including equities and debt. A mutual fund, which is managed by a dedicated fund manager, is invested in stocks, bonds, as well as other securities. This high-risk investment has the efficiency of yielding high returns.
National Pension Scheme
Another Government backed scheme, National Pension Scheme (NPS) is a low risk retirement savings plan that is for, by nature, long term. NPS is a good option for investors who want a steady income after retirement while still saving money on taxes.
Senior Citizen Savings Scheme
One more in the list of low risk and guaranteed returns investment scheme is the Senior Citizen Savings Scheme (SCSS). Under this scheme, any citizen of India over 60 years of age can invest up to Rs. 15 Lakh for interest as high as 8.6% per annum.
Gold ETF
Paper Gold investments is a combination of Gold and stock investment. It is considered as a safeguard against market inflation, where because of Gold being a liquid asset provides guaranteed returns.
It is critical to have a thorough understanding of various investment strategies before beginning to invest. Because the majority of investors invest depending on their risk tolerance, there are three levels of risk attached to them – low, medium, and high. Also, before considering a suitable investment plan one should take into account the tax obligation on the returns from that investment, for example a stock investment return is subjected to taxes but PPFs are exempted from taxes.