Top 10 Investment Options in India You Must Know of in 2022

Personal Finance

The financial market is highly unstable at this stage. If one doesn’t start investing, it will become a huge problem, especially when one faces a financial crunch.

Therefore, you can learn more about the top ten investment options available in India in 2022 and start investing in one of them. It might not be feasible for you to start investing in multiple options simultaneously from the beginning. So, you can weigh the options, learn more about their pros and cons, and then decide which investment option will suit you.

What are the Top Investment Options in India in 2022?

Here are the 10 best investment options in India you should look at:

  1. Public Provident Fund or PPF

Backed by the Indian government, this investment scheme is usually under the supervision of national and public sector banks. It is a risk-free investment option with a high lock-in period of a minimum of 10 to 12 years. It means you will be able to liquify the investment after the lock-in period gets over.

You can open only one account after turning 18 years old, with a minimum monthly payment of INR 500 or an annual payment of INR 500. You can deposit a maximum of INR 1.5 lakhs per month. Usually, the current interest rate is 7.10% per annum, without a grace value of 0.25% to 0.75%.

  1. Post Office Monthly Income Scheme

As the name suggests, the post office’s monthly income scheme is under the regulation and governance of Indian post offices. It’s almost like a fixed deposit where you give a lump sum of a minimum of INR 1000. Every month, you will get a fixed interest rate calculated on your deposited principal amount of 6.60% per annum.

The maximum amount you can deposit for a single-holder account is INR 4.5 lakhs, and for a joint account, it is INR 9,00,000. The interest earned is taxable, and you might be exposed to deductions if you foreclose the deposit.

  1. National Savings Certificate

The National Savings Certificate, or NSC, is one of the best investment options in India in 2022. Being a risk-free investment, it is under the governance of the Indian government, and the certificates are available at several Indian public and private banks. A person has to make a minimum investment of INR 1000 with 12 installments in a financial year in multiples of 100 only.

There is no upper limit on the investment amount. The interest rate is compounded annually and paid at maturity. With a five-year lock-in period, your investment will be in safe hands since you won’t be able to prematurely sell it. One of the main benefits of a National Savings Certificate is getting tax exemption under Section 80C of the Income Tax Act.

  1. Government Bonds

You can purchase bonds directly from the Indian government as an individual investor and use the same for several other investments. To store all of these items, you must have a valid bank account or a Demat account. There is no fixed bond price because the government itself announces it. You can buy it through different kinds of stock exchanges or get listed in commercial bank listings.

  1. Sovereign Gold Bonds or SGB

Sovereign gold bonds are under the management and governance of the Reserve Bank of India and are usually denominated in terms of grants of gold. It would help if you had a minimum investment of 1 gram of gold. The bonds can be issued multiple times in a financial year, provided you have a valid PAN card.

The maximum amount of gold you can purchase through SGB is 4 kg for individuals and 20 kg for trusts. Also, RBI offers an INR 50 discount on purchasing 1 gram of gold online. The investment return is approximately 2.5%, paid half-yearly, with a maturity term of eight years.

  1. National Pension Scheme or NPS

The National Pension Scheme is ideal for people looking forward to building up a wonderful life for retirement. The investment will go into pension funds monitored under the supervision of government authorities and further invested in various stock market portfolios associated with the least amount of risk. Based on your convenience, you can deposit either in a Tier 1 or Tier 2 NPS account.

  1. Equity Mutual Funds

You all know what this type of investment option is. As the name suggests, you can invest in equity mutual funds through the stock market and buy some shares in any company or the brokerage itself. Although there are risks associated with equity mutual funds, the returns are quite high, and that’s why it’s one of the best and most convenient investment options.

  1. Gold Exchange-Traded Funds or ETF

Gold ETFs are electronic transactions through which you buy gold virtually instead of physically. You will have a Demat account where all the details of the asset holdings will be stored in terms of the grams of gold you have under your name. There is no upper or lower limit to ETF investment, which is why it is one of the best investment options for people who want to buy gold in physical form but cannot do so due to the increasing price. It depends on the gold market, where the returns will increase if the market price goes up and vice versa.

  1. Unit-Linked Insurance Plans or ULIP

Unit-linked insurance plans are almost like policies, where you must buy a certain number of units at the bid or ask price. Each fund will have a certain number of units, and you can either deposit in one fund scheme or multiples at the same time.

  1. Real Estate Investment Trust or REIT

REITs are almost equivalent to mutual funds. However, you will buy certain sections of the real estate market instead of shares or stocks. It is also volatile because the real estate market’s actions are constantly changing, and the prices are also increasing. However, the chances of suffering a loss are low because the real estate market usually witnesses an appreciation in property values.

Wrap Up

Since we have already discussed the basics of India’s top ten investment options in 2022, your job is to decide which one you want to go with for maximum returns and several other perks.

You can read related articles on the Piramal Finance website and learn more about the different investment options.