Types Of Investments In India 2022

There are many fields, departments, and countless paths in today’s world. We get to choose from so many things.

The environment for investment is also the same. If you want to invest, you don’t have any limitations; you’ll find numerous options to match your preference, financial goal, tenure, and return. It’s fantastic that you choose based on suitability, not by motivation or force.

This article aims to provide you with an overview of different types of investment options in India for the year 2022. It will help you to choose the most suitable and the best investment option for your portfolio. 

So, come and have a look at this comprehensive and insightful article to make an informed investment decision in 2022.

1) Equities

Investing in the stock market is a great way to earn money. However, the risk factor continues because it is considered a high-risk, high-return environment. Investments in the stock market can be financially rewarding, but sometimes they can prove quite risky.

Novice investors should stay away from the stock market unless they understand the whole functionality of the stock market. Prices follow the demand and supply factors in the market, so predicting profitable stocks will take time and effort.

Equities can be a gamble if you have excellent expertise in market and risk factors.

2) Gold

Using a Demat Account, you can invest in gold exchange-traded funds (ETFs) by following the market price of gold. Buying a gold ETF would be like purchasing a digital gold product. Gold is the most suitable solution if you are interested in investing in gold.

But, it may have flaws. You need to discover diversification in gold investments to have a good return. Never restrict yourself to only one commodity type.

3) Mutual funds

Mutual funds are funds aggregated from many investors and used to buy debt and equity products.

You can buy mutual funds using your Demat account. They come in three categories: debt funds, equity funds, and hybrid mutual funds. Furthermore, Mutual funds perform depending on the trajectory of the stocks they invest. 

The manager of a mutual fund makes investments on your behalf. Mutual funds involve risk because it is predicted by subjective analyses of the fund manager. Sometimes it may get wrong, so you need to go for a self-evaluation before investing in mutual fund schemes.

4) Fixed Deposits

Fixed deposits are the most popular investment option in India. They provide you with a fixed interest rate for a specific tenure.  Suppose you get the return at a fixed time, however, you can maximize it by reinvesting your deposits in fixed terms.

Fixed deposits are excellent investment options because they won’t fluctuate based on retail inflation rates. So, you will earn good returns.

5) P2P lending

P2P lenders are getting a high rate of return than the banks. Some websites directly connect borrowers to P2P investors for a good return. There are many reasons to invest in peer-to-peer (P2P) lending as an alternative to investing in the market. It is an alternative investment plan for investors who dislike the market’s volatility. It helps you create new wealth-creation opportunities by diversifying your overall portfolio.

6) Public Provident Fund

It is one of the safest investment options today because PPF offers a compound interest rate of 7.1% annually, and any interest earned is tax-free. It allows you to deduct up to 1.50 lakhs of your taxable income each year.

After five years, you can withdraw PPF, and the maximum period from the start date to the retirement date is 15 years.

You can also apply for a loan using your PPF balance as collateral. However, the interest rate on it is higher than what you earn.

7) Unit Linked Insurance Plans

Unit Linked Insurance Plan (ULIP) gives the dual benefits of insurance and investment.

It has a death benefit option where nominees will be paid in case policyholders die during the ULIP term.

Multiple fund options are available for ULIPs like equity funds, debt funds, and balanced funds. Equity fund has higher risk however debt funds have stable returns. It is better to have a hybrid of both the funds, that come under balanced funds.

There is a lock-in period of about three to five years with ULIPs. It solely depends on the market. So, it is better to take the advice of a fund manager for a safe return.

8) Real estate

Real estate also serves the dual purposes of personal uses and investment options. Real estate can give you rental income and capital gains. But, it is a risky market and it takes time to sell your real estate properties. It can’t generate instant cash for you.

Real estate is a tangible asset that involved risk factors and market volatility. It might hamper your investment plans if you are stuck in selling those properties.

9) NPS (National Pension Scheme)

NPS (National Pension System) is a voluntary, defined contribution retirement savings plan that allows subscribers to save smart during their working lives for retirement. 

It aims to instil a habit of saving for retirement benefits. It provides Indian people with an option to have an adequate retirement income.

PFRDA-registered professionals will invest in your diversified portfolios. Companies convert the personal savings of their employees into pension funds.

The portfolio may consist of government bonds, bills, corporate notes, and shares. The growth of accumulated assets will depend on investment returns.

10) Bonds

A bond is an investment whereby you lend your money to a company or government. Municipal bonds, on the other hand, are issued by municipalities. Bonds are issued by corporations, governments, and other organizations. When the bond matures, you will get the return with interest payments.

Conclusion

To be a successful investor, you need to know the difference between investing and saving. In the modern financial world, saving is considered a slow process to build wealth. By implementing innovative investment strategies, you can increase your wealth.

As a Finance Company, Piramal Finance can provide you with expert advice to take the right investment decision. It can help you choose the best investment option depending on your money, time, and risk.