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10 Most Popular Investment Options in India

best investment options

Why we invest? We all have our financial goals in life, and investment happens to be one of the significant ways to get there. We invest because we believe in achieving a secure financial future. Investment is crucial to creating financial stability.

What investment means? It means putting money to work. Investment is a deliberate way of putting money in to different channels that help gain profitable return and expand your financial base.

How to invest? There are several ways to investing money. Broadly, they can be categorized in two. One is by investing in monetary schemes such as purchasing shares, bonds, and stocks etc. The second is, investing in fixed tangible assets whose value goes up with time.

What to consider before investing? ‘Risk’ is an indispensable part of investment. In fact, every investment option comes with certain amount of risk and return as well. Higher the return, the higher will be the risk. Important is, how you calculate the risk, weigh you requirements and make an informed decision before investing your money.

In this article we have 10 most popular and best investment options available in India.

Public Provident Fund

PPF is the safest and secure long term investment option available in India. And certainly it’s one of the best investment products that actually benefit the salaried and fixed income group.

Public Provident Fund is non-taxable. There is no tax on the interest earned.

PPF accounts can be opened in Banks or post offices. Although these are independent of savings accounts, having both of them at one place is often more convenient.

The PPF account comes with a 15 year lock-in. It accepts a maximum of Rs.1,50,000 per financial year and accumulates interest on compound basis. However, you can extend the time period for the next 5 years.

The current interest rate is 8.10% for 2016-17 financial years.

Public Provident Fund allows partial withdrawals of investment amount only at the end of 6th year. You can also take a loan against the balance available in PPF account.

Post Office Saving Schemes

Post Offices Saving Schemes are risk free and considered one of the best investment options for govt. employees, businessmen and other salaried class. The rate of interest in post office schemes is quite moderate. Besides, the investment offers tax benefits under section 80C of Income Tax act with with zero risk factor.

Some of the most popular post office savings schemes are,

  • Recurring Deposit Accounts
  • National Savings Certificates
  • Senior Citizen Savings Scheme
  • Monthly Income Scheme
  • Kisan Vikas Patra
  • Sukanya Samridhhi Yojana

For more details visit India Post.

People from different segments of society can actually benefit from the schemes. Retired persons with monthly income requirements can invest in Monthly Income Scheme (MIS) or Senior Citizen Savings Scheme at 7.8% interest on investment per annum.

Likewise, Sukanya Samriddhi Yojana can be opened in the name of girl child up to the age of 10. So the parents can utilize the maturity amount after she completes 21, on her higher education and fulfill her passion and dreams without any financial pressure. The rate of interest is currently 8.6% per annum which is compounded yearly.

FD and Term Deposits at Banks

Fixed deposit or term deposit schemes of banks are yet another options for risk free investment in India. The process of investment is pretty easy and the accounts are convenient to access.

You can invest any amount in fixed deposits for a maximum period of 10 years. However, the interest varies depending the tenure and amount of investment.

Likewise, if you want to invest your money on a monthly basis, recurring deposit schemes are best for you. The interest rate is same as the rate applicable to fixed deposits. However, the interest becomes taxable when it exceeds 10k per annum.

Both the schemes are ideal for short term and long term investment goals.

Investment in Gold

Gold as an investment is a spectacular option in India as the value increases pretty quickly. If you are looking for gold investment schemes you can simply approach banks or trusted financial organizations.

Several gold investment schemes such as gold deposit scheme, gold ETF, Gold Bar, Gold mutual fund can offer real financial benefit in the short period of time.

Real estate

Housing, hospitality, commercial establishments, or industry set up- the real estate sector has a significant prominence just about everywhere.
Being a tangible possession, real estate is one of the best investment decisions. This is risk free and the value go up within 6 months.

Mutual Funds

Investing in stock market through mutual funds is much popular these days.

Mutual fund can earn better returns than any other investment plans, although it involves certain amount of risk.

Mutual funds are usually opted by those who want to invest in equities and bonds and take risk in order to get profitable returns on maturity.

One of the best ways to invest in Mutual fund is by choosing Systematic Investment Plan. SIP gets you more returns compared to other investment options available in the market.

ULIP for Long Term

Unit Linked Insurance Plans are a long term investment option that invests in debt and equity market. It offers flexibility in investment and provides better liquidity and tax benefits as well.

Corporate or Company Fixed Deposits

Corporate fixed deposits often provide higher interest rates as compared to banks.

It involves certain risk as the company FDs do not come under the control of RBI or insurance benefits. If you are ready to take the risk and planning for long term investment option, company FD is for you.

However, you should select the FD duration carefully as Company FD doesn’t allow premature withdrawal.

Direct Equity Share

Go for this investment option only if you have a strong hold on share market products. Unless you know how to analyze share stock, investing in direst equity shares can be a matter of risk.

If the investment is for a long time, the return will be higher.

Investment in Bonds

Skeptical regarding mutual funds and equity market investments? Investing in bonds is a better and safer option for you.

There are several bonds that offer high rate of returns on investments. Bond issued by the government are usually offered for 10 years at 7.70% interest.

Recommended Reading

Investment is an important decision of life, whether it’s gold, house or bonds. One wrong step can lead you to regret. So, plan, research and explore the best investment options given above in order to enhance your financial security. But remember, you should always have a diversified investment strategy which helps minimize the risk and accommodates your financial needs whenever you need. If you are a beginner, here is a great post to help you have a better idea on your investment plans.


  1. Jignesh Shah

    All the schemes and investing options present in this article are suitable for every type of investor, as here both long term and short term investments are present. Every beginner, willing to invest in Mutual Funds or any other option is always confused about which option to choose as the most suitable one for investment activities in order to achieve maximum returns.

  2. Jignesh Shah

    Meera Santoshi, people in India are always looking out for better ways to grow their money. In this context, the image you have shared is apt. Gold and Provident Fund are options that everyone is aware of. SIP Mutual Funds are slowly catching up. A good source of passive income always helps in oldage.

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