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Top 10 Long-Term Investment Plans in India

Choosing the best investment options can be difficult. Before deciding on one, you must consider a variety of factors ranging from investment objectives to associated risks. Some investments are made to meet specific goals, such as a home purchase, while others are made to provide a secure retirement.
 

Top Long-Term Investment Plans in India
 

Here are some of the apt long-term investment strategies to consider.
 

  • Fixed deposits 

    Banking institutions offer fixed deposits (FD), which are among the safest long-term investment options. Their returns do not fluctuate in response to global events, as many other schemes do. You can integrate them into your portfolio to create a balance of more and less-risk investments. The bank FD’s interest rate can range between 5% to 8.5%. One may avail of tax benefits depending upon tenure.

    Other features:

    • FD interest is paid monthly, quarterly, semi-annually, or yearly.

    • You may be able to get a loan against your FD, depending on the amount and term.

    • They provide guaranteed1 returns, and there is no risk of losing your principal.

  • ULIP plans

    A ULIP is a type of plan that provides investment and insurance benefits. Under this scheme, a portion of your investment is devoted to insurance, while a significant proportion is invested in various asset classes such as bonds, stocks, and so on. Moreover, investing in ULIP also comes with a tax* benefit.

    Other features:

    • ULIP plans have a three to five-year lock-in period.

    • You have the option of selecting an asset class based on your risk tolerance.

    • The insurer permits you to switch funds during the policy period in order to protect yourself from market fluctuations.

  • Real estate investment

    Real estate investment falls under the category of generational wealth and is one of the aptlong-term investment plans with more returns. Under this, you can invest in empty plots, flats, commercial spaces, and residential properties. The best part about investing in such assets is that, in addition to capital appreciation, you can earn passive income in the form of rent.

    Other features:

    • The value of real estate assets typically increases every six months.

    • Your property's worth does not fall in response to negative market news.

    • You can mortgage them to secure a high-value loan at a lower interest rate.

  • Mutual funds

    Mutual funds are a type of investment scheme in which funds are pooled from various investors with a common goal and invested in specific securities. Professional fund managers manage this type of long-time investment plan. Mutual fund investments are broadly classified as equity-oriented funds, debt funds, and balanced funds.

    Other features:

    • Your investment is spread across various asset classes and stocks.

    • Their returns have the potential to outperform inflation.

    • It provides better liquidity. Once you submit your redemption request, the amount will be credited to your account within one to three days.

  • National Pension Scheme (NPS)

    NPS, which is backed by the government, is another more-return long-term investment. This investment option aims to secure your retirement, and your funds are invested in government securities, bonds, equities, and so on. NPS gives you the option of going auto or active. The former automatically invests your funds in various asset classes. In the latter, you are free to select assets based on your preferences.

    Other features:

    • Partial withdrawal of funds is allowed in the case of an emergency.

    • The investment is locked in until you reach the age of 60.

    • The interest income from NPS is tax*-free.

  • Initial Public Offerings (IPOs)

    When a company wants to raise funds from the public or list on the stock market, it goes through an IPO. IPOs are issued to clear existing debts, business expansion, and a few more. When you subscribe to an IPO and the stock is listed, the price of the stock fluctuates in response to market conditions and global events.

    Other features:

    • IPOs enable you to invest in more-quality companies at a less cost.

    • The day the share is listed, the price usually skyrockets, allowing you to profit from listing gains.

  • Public Provident Fund (PPF)

    PPFs are another apt long-term investment strategy in India. You can open your PPF account at a post office or a bank. The amount you invest in this scheme has a 15-year lock-in period, and partial withdrawal is allowed only after six years. The amount you contribute to your PPF is tax* deductible under Section 80C.

    Other features:

    • You can begin contributing to PPF with as little as ₹500.

    • The returns they provide are unaffected by market volatility.

    • The interest paid on them is compounded annually.

    • The current interest rate on PPF is 7.10%.

  • REITs

    REITs are a relatively new concept in India. A real estate investment trust (REIT) manages a portfolio of more-value real estate assets. Companies in this scheme lease property and earn interest income on it, which is then distributed to investors.

    REITs function similarly to real estate in that you benefit from capital appreciation as well as passive income (dividend in this case). However, the primary distinction between REIT and real estate is that the former is owned by a group of investors, whereas the latter is owned solely by you or jointly with a close relative.

    Other features:

    • REITs provide liquidity benefits.

    • They have the potential to outperform inflation with their returns.

    • They provide transparency because they are regulated by the Securities Exchange Board of India (Sebi).

  • Senior Citizen Saving Scheme (SCSS)

    SCSS are long-term investment plans with tax* advantages. This plan is available to senior citizens over the age of 60. The scheme's goal is to assist the elderly in dealing with various post-retirement financial crises by providing regular income. SCSS can be invested through a post office or a bank, and the returns are 8.6%.

    Other features:

    • The maximum investment amount is fixed at ₹15 Lakh.

    • The investment term is five years, but it can be extended for another three years.

    • In the event of an emergency, premature withdrawal is permissible.

  • Bonds

    Bonds are another risk-free investment option. They are essentially debt instruments issued by the government or large corporations to accomplish specific objectives. Investing in them allows you to earn adjustable or fixed-rate interest. In India, the most common types of bonds are inflation-linked bonds, perpetual bonds, sovereign gold bonds, and zero-coupon bonds.
     
Conclusion
 

Long-term investment opportunities abound in India. However, the decision to select the best among them should be based solely on your future goals and risk tolerance. 
 

L&C/Advt/2023/Jan/0062

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Frequently Asked Questions

What are the benefits of long-term investment? 

Long-term investing allows you to diversify your investment portfolio in response to changing needs and growing families. It eliminates the risk of capital loss while letting you recover from investment errors.

What kinds of risks are associated with long-term investment plans?

Long and short-term investments both carry some level of risk. The most common of these are listed below.
 

  • Inflation risk
  • Credit risk
  • Market-related risk
  • Liquidity risk

Disclaimer

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not guaranteed issuance plans, and they will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and does not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • 1Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry
  • THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICY HOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.
  • Past performance is not indicative of future performance.
  • All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.
  • Please make your own independent decision after consulting your financial or other professional advisor.