Best Investment Options for Salaried Persons in India

Personal Finance

To have a solid financial foundation, you should invest money with care. Unfortunately, not every investment will indeed yield enormous profits. But there is a better chance of seeing decent returns if you invest and for a long enough period.

A salaried individual must balance investment and spending within a limited income. Investing money regularly is one way to grow your money. There are many investment options.

Salaried people should consider the amount, risk, and uncertainty before making investment plans. Consider the profit before deciding on investment plans. Here are a few of the top investment options for salaried individuals.

6 Best Investment Options for Salaried Persons in India

Salaried persons in India can choose from the following seven investment opportunities. However, you should not put all your eggs in one basket. Instead, spread them out over several investment options to mitigate/control your risk.

1. Employee Provident Fund (EPF)

Salaried persons have the EPF as their primary investment option. Provident funds are retirement savings accounts. In this, the employer and employee contribute a fixed percentage of the monthly wage.

Contributions up to INR 2.5 lakhs in your EPF may be eligible for a tax deduction if you are an employee. EPF is one of the important investment options for salaried persons. Many employers offer EPF options where the EPF amount is deducted from your salary before your salary is credited.

2. Stocks

In 2022, investing in markets has become simple and commonplace. This is because many stock brokers provide low-charge trading options. You can open Demat accounts with stockbrokers within seconds. The account is then used to trade stocks. Many banks also function as securities through connected entities. For example, if you have an account with ICICI Bank, you can trade through ICICI securities.

Direct equity investments are very high-risk, but they also offer exceptional profits. Informed stock investors can earn a CAGR of 10% or more. Investments in the stock market can be as little as Rs 10. Investing in stocks should only be done after carefully considering the company.

3. Real Estate

Real estate can be a good investment option if you have a medium-to-high wage.

Here are some benefits of investing in real estate:

  • You get rental income. Investing in real estate can be a reliable source of income. You can get a steady passive income with a second property. The investment provides exceptional safety for your money. Income from rental properties can be used as additional investments. Rent depends on the location, size and condition of the property.
  • Property values increase in developing areas. Property values, particularly in metropolitan locations, will increase as the locality grows. It’s commonly believed that the longer one holds on to an investment, the greater the return. Any property that appreciates over time is an excellent investment. You can also increase the rent on your property every year. However, get the property evaluated before investing.
  • The real estate market always recovers. The real estate market has always recovered from crises and periods of uncertainty. After each financial crisis, such as the Great 2008 Recession, real estate prices rebounded.

As a result, real estate can be a safer investment than other methods listed here. Investing in real estate means future generations can benefit as well. Real estate can be used to create a legacy for future generations.

4. Gold

Gold has high liquidity, low risk, and long-term returns that exceed inflation. Hence, gold has become India’s popular conventional investment option.

Gold offers a strong hedge against equities. Investing in gold can be done in two different ways.

  • Physical gold (jewellery, coins/bars)
  • Paper gold (exchange-traded funds, equity-based gold funds, etc.)

Paper gold is as it sounds: you purchase gold only on paper. Since it is not actual metal, it has high liquidity.

You have to go to a jeweller to get physical gold evaluated. The jeweller will give you a price. In contrast, paper gold is bought online. You can purchase paper gold through Securities. Paper gold can be sold any day, any time. It does not need an evaluation.

Paper gold is more suited for short-term trading than for long-term investment. Examples of paper gold:

  • ETFs
  • Gold certificates
  • Pool accounts
  • Gold futures accounts

You need not hold physical gold if you are worried it will be stolen.

5. Equity-Linked Savings Scheme (ELSS)

Individuals and HUFs can deduct up to Rs.10 lakh from their taxable income for that assessment year. They can do this by investing in ELSS Mutual Funds. ELSS is an Equity Mutual Fund authorized by Section 80C of the Income Tax Act 1961.

ELSS has a maturity period of three years, which begins on the day you make this investment. The returns are low compared to direct stock investing. The tax benefits more than make up for the negatives.

6. Mutual Funds (MFs)

MFs are professional-managed products. They combine investors’ money and invest in various financial markets, including stock, debt, and hybrid markets.

There are various MFs. You can choose based on your risk appetite, income, and investment goals. You have complete flexibility over your investments. You can make monthly recurring investments (SIPs), or you can make a lump sum investment. Many MFs have a minimum SIP limit of Rs 100.

MFs are the best option for those who want to invest money for the long term but do not have the time to do trading. You can set up a monthly contribution to an MF. Then, you can reap long-term advantages without compromising your goals.

MFs also have a risk factor. You can choose an MF depending on how much risk you are willing to take (from low to high risk).

Returns in MFs vary depending on the scheme. Still, MFs have a CAGR of 11-14%. Go through the debt-equity ratio, returns, and expense ratio before selecting an MF.


Today, there are many avenues to invest. You can invest in direct equities, MFs, ELSS and many others. Hence, consider your risk appetite, income and financial goal before choosing an investment option. However, consult an expert if you cannot determine how to invest.

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