As someone in your 20s and 30s in India, you may not have considered investing in financial products. You are young and single, and the fact that life’s uncertainty doesn’t bother you. Your spending is concentrated mainly on leisure and luxury. While there is nothing wrong with that, you need to stop and think about your investments, especially if you are a sole breadwinner in your family.
Have you ever wondered what your dependent siblings or parents will do if something were to happen to you? This is the reason you need to put your money into an investment that will not only cater to your family’s financial needs in the future but also help you create wealth while you are earning. This is why you need high return investment plans apart from term insurance in your financial portfolio.
Here are some of the reasons why you need to have high-return financial products to make the best investment plan.
- Helps you grow your wealth
The best way to grow your income is by investing. There areseveral instruments, such as stocks, bonds, and deposit certificates, that offer you veritable returns over the long-term. Do your research. Make sure you have a clear purpose and well-defined possibilities. For sure, the best investment advice is to learn enough about the assets you’re planning to get some profits from.
- Retirement plan
If there is ever a good time to think about your retirement, it is now. When you are young and able, you can strategize your savings and invest in high-return plans to create a large corpus of wealth that will help you lead a comfortable life when you stop working.
- Income tax exemptions
Apart from term insurance, many other products offer you a high return and tax exemptions. All the investments that fall under Section 80C of the Income Tax, such as Unit Linked Insurance Plans, National Savings Certificates, Public Provident Funds, and more, are eligible for deductions up to Rs. 1.5L per annum. However, when creating the investment plan, do consider risk, returns, and liquidity, other than tax saving before investing.
- Achieve financial goals
The returns from these investments can help you reach financial goals such as buying a house, a car, or paying for your child’s education abroad.
Equity funds are high-return investment plans that are volatile instruments affected by market fluctuations. However, if you are an aggressive investor with an appetite for risk, then these can be ideal instruments for your long-term investment plan.
Let us discuss some common questions regarding these instruments.
How to plan high return investments?
If you are a beginner and want to explore the world of investment, then you are advised to start small and choose low-risk products. Once you are confident, then gradually increase the investment amount and diversify your portfolio accordingly. Investment companies like RWInvest offer extensive guides for each step of the process.
Some things you can keep in mind include:
- An investment plan is one that is devised after careful research. So, thoroughly educate yourself about the options and then invest. Term policies offered by insurance providers, such as Max Life Insurance, allow you to compare the policies in terms of benefits and features before investing. Term insurance is an integral part of an investment plan along with high returns products to balance the risk and secure your family’s financial interests against eventualities.
- Never choose products that offer high returns quickly as the risk factor in these schemes is very high.
- Analyze your investments periodically
- Take tax exemptions and deductions when planning your investments
- Avoid complex financial instruments and make your investment plan simple by choosing transparent products.
What are equity funds?
Equity funds are kind of mutual funds that invest in shares and stocks of a company. These funds invest a maximum portion of the corpus on equity shares of the company and the remaining on debt and money market instruments. The asset allocation of these funds is managed by an equity manager either actively or passively.
What are the best high return investments in India?
As a beginner, you need to choose your investment products wisely. Here are some of the most common investment options for a new investor.
- Mutual Funds
This is a popular investment option among investors. Mutual funds provide good returns in the long run. It is the best investment plan because experts manage mutual funds in the domain, hence the risk of losing money is less.
- Public Provident Fund
These tax-saving investments offer high-interest rates and are backed by the Government of India. They are a long term investment plan with a minimum period of 15 years. However, you can make premature withdrawals after a specific period.
- National Savings Certificate
National Savings Certificatesare simple investment plans backed by the government of India with a 5-year tenure. They offer a reasonable rate of interest and are tax-exempted under section 80C of the Income Tax Act.
Who should invest in Equity funds?
Since equity funds are risky and volatile instruments, they are ideal for investors who have a high-risk appetite and don’t mind investing for at least 7-10 years. In the long run, these funds yield attractive returns.
While high return investment plans require planning, strategy, and experience before investing, they make a valuable addition to your portfolio. Apart from the term insurance, you can also consider investing in these instruments to make your financial portfolio the best investment plan with savings-cum-investment products. However, be sure to monitor their performance periodically to ensure that they are giving you the returns you expected.