When we talk about investment mediums, it is essential to keep in mind that today there are various avenues open for parking one's money. Whether your investment goal is long-term or short, you can diversify your portfolio to gain substantial wealth, if you strategize well.
The stock market is a volatile space. As is normal investor behavior, many pull out their money from 'unstable investments' when the markets dip low. However, not all unconventional investment mediums are unsafe or unstable. Some can turn out to be gold mines during a period as such.
In this blog, we will read about the 10 investment mediums you can bank on in 2022.
|Medium||Ideal Tenure||Risk||Tax Exemption|
|Investment via leasing||1.4-4 years||Moderate||Tax deduction applicable|
|Equity Market||5 years and above recommended||Moderate - High||Rs. 1,50,000 is exempted under Section 80 C of the Income Tax Act (Only applicable for ELSS mutual funds)|
|Debt Mutual Funds||1-3 years recommended||Low - Moderate||No tax exemption|
|Real Estate||Long-term||Moderate||Returns are taxable|
|Fixed Deposit||1-5 years||Low||Rs. 1,50,000 is exempted under Section 80 C of the Income Tax Act (Only applicable for tax-saver fixed deposits)|
|Gold||-||Low||Tax exemptions are applicable as per certain clauses|
|RBI Taxable Bonds||7 year lock-in period||Low||Tax-free|
|National Pension Scheme||Open from 18-50 years||Low||Tax exemptions provided as per Section 80 C of the Income Tax Act|
|Pradhan Mantri Vaya Vandana Yojana||For people above the age of 60||Low||-|
1.Investment Via Leasing
What Is It: Investing via Lease is an upcoming investment option in India and it basically means investing in an asset which can further make money for you. There are companies that facilitate online, hassle-free leasing, and this in turn makes the experience hassle-free.
Returns: You can earn substantial returns via leasing, which is 15%+ IRR if you invest through the right platform.
Risk Factor: It can be categorized within low-moderate risk. However, it is definitely lesser than the stocks market, as it is not guided by market forces.
What Is It: It is a platform where people invest in listed companies. You can either do so directly through the stock market (NSE, BSE etc), or through equity mutual funds, in which case, a pool of money contributed by investors is portioned in different stocks via the fund manager.
Returns: You can garner high returns when the market is in its bull phase and similarly, face a major loss when the market is lunging on the bear.
Risk Factor: This platform is highly risky, simply because it is controlled by market forces, which are unpredictable and volatile.
3.Debt Mutual Funds
What Is It: These are mutual funds which have relatively less risk because they invest in government entities and are not influenced by market forces.
Returns: They are less volatile and can give you a maximum return of upto 9-11% in 3 years.
Risk Factor: They can be categorized between low-medium risk.
What Is It: Real estate deals with investing in land and property. This again is a more stable source of income as the value of land appreciates vastly and thus, keeps in pace with inflation.
Returns: Returns are appreciative as the value of fixed assets like land increase unless it is subjected to unavoidable circumstances like war or natural disasters.
Risk Factor: While they are not as great as the stock market, one can face liquidity, market and interest rate risks.
What Is It: An FD is a popular investment medium in India. More than 50% investors in the country, prefer an FD over other unconventional means. It provides a fixed rate of interest and is suitable for retired individuals or even people who want a stable alternative-income.
Returns: In 2020, the fixed deposit rate is approximately 6-7%
Risk Factor: It is a low-risk investment avenue
What Is It: A very unique thing about investing in gold is that when the market is low, the demand for this asset increases, simply because the units are priced lower. As mentioned before, gold has an appreciating value and it still remains one of the most popular mediums in the country.
However, today you don't have to invest in physical gold, you can simply invest online, to garner similar returns.
Returns: It is a volatile medium. However in the past, the returns have not turned negative.
Risk Factor: It is relatively less risky.
7.RBI Tax-Free Bonds
What Is It: These are suitable for individuals who fall in the high income category. The returns are slightly better than fixed deposit and taxable bonds, because after deducting tax, the returns of the latter avenues become lesser than tax-free bonds.
Returns: As of 2020, the returns stand at 5.5%.
Risk Factor: The risk factor is quite low in this avenue.
8.National Pension Scheme
What Is It: NPS is aimed at providing pension to the citizens. Investors can regulary deposit money to this account. Once retired, investors can withdraw a lump sum amount and the rest is paid annuity.
Returns: Since there are various NPS schemes, the rate of interest is cannot be generalized. However, as of now, the interest is approximately 8-9% for a five-year time frame.
Risk Factor: Since it is a government-sponsored initiative, the risk is low.
9.Pradhan Mantri Vaya Vandana Yojana
What Is It: This scheme is offered by the Life Insurance Corporation of India (LIC), This is scheme is only for senior citizens above the age of 60 years. The scheme started on May 26th and will end on March 31st, 2023.
The investors of this scheme will get a fixed return either monthly, quarterly, half years, or annually, depending on the plan they choose. The maximum amount that can be invested is 15 lac.
In case the investor dies, the money will be paid to the nominee after the investment period. the maximum pension that will be paid is Rs. 9250.
Returns: The returns are fixed at 7.4% per annum.
Risk Factor: The risk factor is low since it's a government-backed scheme.
10.Public Provident Funds
What Is It: It is a saving, as well as a tax saving instrument. It is a mandatory fixture for any organization with an employee count of 25 to provide this perque to their employee. The most attractive part about this instrument is that it's tax-free.
Returns: The current PPF rate as of 2020 is 7%.
Risk Factor: This is a low-risk investment instrument because it is not subjected to market forces.
Today there are various options to choose from, but it largely depend on your financial goal to see which platform suits best for you!
Subscribe to our page to know more about Grip, latest financial knick-knacks, and shenanigans that take place in the world of investing!