Best Place To Invest Money In India: Top 10 Investment Mediums
In the realm of investments, many options are available today for individuals to park their money. Depending on your investment goals, whether short-term or long-term, a well-strategised diversification of your portfolio can lead to significant wealth accumulation.
The stock market, known for its volatility, often sees investors withdrawing their money from what they perceive as 'unstable investments' during market downturns. However, only some unconventional investment mediums are safe and unstable. Some can prove to be lucrative during such periods.
What Is An Investment Medium?
An investment medium is how individuals can potentially invest their money to generate returns. It can include various financial instruments such as stocks, bonds, mutual funds, alternative investments, real estate, commodities like gold, and government-sponsored schemes like pension plans.
It is a channel or platform where investors allocate their funds to earn profits or achieve their financial goals over time. This guide will explore the top 10 investment mediums you can consider.
Top 10 Investment Mediums To Bet On In India In 2024
1. LeaseX
This emerging investment option in India involves investing in an asset that can generate income when leased. Some companies like Grip Invest offer online, hassle-free leasing, enhancing the investment experience.
Returns: With the right platform, you can earn substantial returns via leasing with a 15%+ IRR.
Risk Factor: This medium has a low to moderate risk depending upon the credit rating of the deal. It is less risky than the stock market as it is non-market linked.
Read more on What Is Asset Leasing?
2. Equity Market
This platform allows people to invest in listed companies directly through the stock market (NSE, BSE, etc.) or through equity mutual funds, where a pool of money investors contribute is allocated to different stocks by the fund manager.
Returns: The market's bull phase may garner high returns. Conversely, a bear market may lead to significant losses.
Risk Factor: This platform is risky due to its susceptibility to unpredictable and volatile market forces.
3. Debt Mutual Funds
These mutual funds are less risky as they invest in government and private entities. Market forces do not influence these.
Returns: They are less volatile and can yield a maximum return of up to 9-11% in 3 years.
Risk Factor: They carry a low to medium risk.
4. Corporate Bonds
Corporate bonds are debt instruments companies issue to access additional capital for expansion and operations. Corporate bonds are one of the most popular instruments among investors looking for higher returns than fixed deposits (FDs) through periodic (monthly/quarterly/annual) interest payments.
Investment grade bonds, i.e., those rated BBB or higher, have also shown a very healthy performance in India over the last 30 years.
Returns: 9-12% yield
Risk: Lower risk exposure than stocks.
5. InvoiceX
InvoiceX is the first-ever credit-rated, diversified version of invoice discounting offered by Griv Invest. Companies may borrow money against their outstanding invoices via invoice discounting.
It is a fixed-income instrument issued under an established RBI framework. Investors are provided with fixed and regular payouts in the form of interest, with the principal being returned closer to maturity. Reputed agencies like India Ratings also rate this instrument.
Returns: Up to 13% IRR
Risk: This medium has a low to moderate risk depending upon the credit rating of the deal. It is less risky than the stock market as it is non-market linked.
Read more on Invoice Discounting: What Is It And How Does It Work?
6. Real Estate
Real estate investment involves investing in land and property. This is a more stable source of income as the value of land appreciates significantly, thus keeping pace with inflation. However, investing in real estate requires due diligence and substantial capital. Fractional commercial real estate (CRE) has become a convenient alternative for investors seeking high-yielding fixed-income investments.
Read more on Fractional Investment: A New Era Of Accessible Investments.
Returns: Returns appreciate as the value of fixed assets like land increases unless subjected to unavoidable circumstances like war or natural disasters.
Risk Factor: While the risks are not as high as the stock market, one can face liquidity, market, and interest rate risks.
7. Fixed Deposit
Fixed Deposit (FD) is India's most popular investment medium, preferred by risk-averse investors. It provides a fixed interest rate suitable for retired individuals or those seeking a stable passive income.
Returns: Although the fixed deposit rate varies based on the repo rate, currently, FD fetches approximately 6-7%.
Risk Factor: FD is a low-risk investment avenue.
8. Gold
Investing in gold is considered a safe haven as the demand for this asset increases when the stock market goes down. Gold has an appreciating value and remains one of the most popular mediums in the country.
Today, you can invest in gold online to garner similar returns without investing in physical gold. Additionally, sovereign gold bonds (SGB) offered by the Indian government also fetch 2.5% tax-free interest p.a.
Returns: Although the returns are not fixed, gold has historically returned 11.2 per cent CAGR in the last 20 years
Risk Factor: It carries relatively less risk than other investment mediums.
9. Tax-Free Bonds
These are suitable for individuals in the high-income category. Returns are better than fixed deposits and taxable bonds because, after-tax deduction, the returns of the latter avenues become lesser than tax-free bonds.
Returns: The interest rate generally ranges from 5.50% to 6.50%.
Risk Factor: The risk factor is relatively low in this avenue.
10. National Pension Scheme (NPS)
NPS aims to provide pensions to citizens irrespective of their profession. Investors can regularly deposit money into this account. Upon retirement, investors can withdraw a lump sum amount, and the rest is paid as an annuity.
Read more on National Pension Scheme: Ultimate Guide For Better Retirement Planning
Returns: The return varies according to the chosen scheme and fund manager. However, the average interest rate is approximately 8-9% for five years.
Risk Factor: The risk is low since it is a government-sponsored initiative.
Conclusion
Various investment mediums are available today, but the best platform depends on your financial goal. Whether you prioritise stability, high returns, or tax benefits, a suitable investment medium awaits you!
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Disclaimer - Investments in debt securities/municipal debt securities/securitised debt instruments are subject to risks including delay and/ or default in payment. Read all the offer related documents carefully. The investor is requested to take into consideration all the risk factors before the commencement of trading.
This communication is prepared by Grip Broking Private Limited (bearing SEBI Registration No. INZ000312836 and NSE ID 90319) and/or its affiliate/ group company(ies) (together referred to as “Grip”) and the contents of this disclaimer are applicable to this document and any and all written or oral communication(s) made by Grip or its directors, employees, associates, representatives and agents. This communication does not constitute advice relating to investing or otherwise dealing in securities and is not an offer or solicitation for the purchase or sale of any securities. Grip does not guarantee or assure any return on investments and accepts no liability for consequences of any actions taken based on the information provided. For more details, please visit www.gripinvest.in
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