Investment Plans

Investment plans assist you in planning your savings for your future requirements through systematic contributions. The plans provide a range of Read more solutions depending on various financial requirements, while assisting you in saving taxes up to Rs. 46,8001. Certain plans have the potential to generate market-linked returns2 of 32.27%3 along with the advantage of life cover. Other plans are also there with short, medium, and long-term durations, with a minimum investment of ₹1,000/month. Some investment plans also provide option of life cover to secure your family’s future. Read less

Investment plans assist you in Read more planning your savings for your future requirements through systematic contributions. The plans provide a range of solutions depending on various financial requirements, while assisting you in saving taxes up to Rs. 46,8001. Certain plans have the potential to generate market-linked returns2 of 32.27%3 along with the advantage of life cover. Other plans are also there with short, medium, and long-term durations, with a minimum investment of ₹1,000/month. Some investment plans also provide option of life cover to secure your family’s future. Read less

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What Is an Investment Plan?

An investment plan is a systematic way of saving and increasing your money in the long term. It helps you decide how much to invest, for how long, and in what instrument, based on your objectives. Certain plans offer tax5 advantages under different provisions, such as Section 80C and 10(10D). Investment amount can begin from as low as ₹1,000/month. Returns would depend on the type of investment plan. For guaranteed plans, returns would be around 4-8% while for market-linked plans, returns may be around 15-30%.

Choosing the right investment plans based on your affordability, risk appetite and future financial goals is important to accomplish them timely. Investment plans help increase your wealth by accounting for the inflation rate. Therefore, it will suffice for future requirements considering the increase in price levels based on inflation.

Some of the best investment plans in India are based on money market instruments and financial securities that help your wealth grow consistently over the long term. However, as the returns are market-linked, you must understand your risk appetite before choosing the right investment plan in India.


Tata AIA Investment Plans


Benefits Of Investment Plans


With varied investment options in India, you must understand the benefits of investment planning and start early to ascertain the required funds at different stages in your life.

Reasons To Buy Insurance Plans Online | Tata AIA Life Insurance
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    Securing Your Family

    If you are the sole earning member of your family, it is important to have adequate financial resources to secure your family in the event of your unexpected demise. Investment plans can help you create wealth for your family in the long term that can secure their life in your absence. 

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    Accomplish Future Financial Goals

    The financial goals keep varying at different stages in your life. As these financial goals must be accomplished at a future date, the financial planning should account for the inflation rate. The different investment plans in India will help you plan and invest in the available options based on your timelines and help you achieve your goals timely. 

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    Wealth Creation

    The different investment plans assist in wealth creation at different rates subject to the policy terms and market conditions. The higher the risk, the greater the returns earned over the long term. 

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    Flexibility

    Flexibility is one of the most important benefits of investment options in India. You can choose the product based on your financial needs, and invest in them regularly at a convenient frequency such as every month, semi-annually or annually, etc.

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    Tax Benefits

    Some investment plans provide tax5 deductions and exemption benefits that reduce the income tax liability by reducing the taxable income.  

30 best Investment ideas in India

India provides an extensive variety of investment plans to cater to various financial requirements—whether for retirement, education for children, or wealth accumulation. The below-mentioned list of 30 investment plans captures the salient characteristics of each scheme.

  • 1. The Public Provident Fund (PPF)

    • A government-backed long-term savings plan with a 15-year lock-in.

    • It pays 7.1% p.a. (Q1 FY25) interest, compounded annually and tax-free.

    • It can be beneficial to create a retirement corpus or to fund long-term goals securely.

    • PPF accounts can be extended in increments of five years beyond their date of maturity.

    • This facility can be a relatively risk-free proposition for risk-averse investors.

  • 2. Voluntary Provident Fund (VPF)

    • An optional extension of the Employee Provident Fund (EPF) where employees can contribute more than the mandatory 12%.

    • VPF contributions accrue the same interest as EPF, presently 8.25% p.a.

    • Withdrawals and maturity values are tax-free if kept for 5+ years.

    • It offers a chance for individuals to contribute to their retirement funds while enjoying EEE (Exempt-Exempt-Exempt) tax5 benefits.

  • 3. Unit Linked Insurance Plans (ULIPs)

    • ULIPs combines life insurance with market-linked investments in equity or debt.

    • ULIPs have a lock-in period of 5 years and provide fund switching according to risk tolerance.

    • Part of the premium is used to provide life coverage, and the rest is invested in market funds.

    • They provide flexibility in investment method selection and can be more useful for long-term wealth creation with protection.

  • 4. Equity-Linked Saving Scheme (ELSS)

    • A tax-saving mutual fund with a compulsory 3-year lock-in.

    • Invests mainly in equities, providing a higher potential for returns with market-related risks.

    • Tax deductible up to ₹1.5 Lakh under Section 80C.

    • ELSS has the shortest lock-in period among tax-saving schemes, and this makes it a potential choice for aggressive investors.

  • 5. National Savings Certificate (NSC)

    • A fixed income deposit scheme offered by India Post.

    • Yields 7.7% p.a. (Q1 FY25) interest paid annually, but on maturity, taxed.

    • Tenure is for 5 years and is tax-exempt5 as per Section 80C.

    • It may be favoured by risk-averse investors who desire sure potential returns without subjecting themselves to possible market risks.

  • 6. 5-Year Tax Saver Fixed Deposit

    • Fixed deposit in the bank with 5-year lock-in and Section 80C tax exemption.

    • Provides interest of between 6% and 7.5% p.a., varying with the bank and term.

    • Premature withdrawal may be barred, and interest earned may be taxed.

    • It could be an appropriate choice for investors who are looking for sound potential yields with risk exposure at the barest minimum.

  • 7. Senior Citizens Savings Scheme (SCSS)

    • For individuals aged 60 years and older.

    • Potential gains 8.2% p.a. interest, quarterly.

    • Maximum investment is ₹30 lakh, and the maturity period is 5 years.

    • Guaranteed by the government, SCSS provides desirable returns and can be used by retirees in preference to seeking periodic income.

  • 8. Sukanya Samriddhi Yojana

    • A small savings scheme has been launched for girl children below the age of ten.

    • Provides 8.2% p.a. interest, tax-free and compounded yearly.

    • Individuals can make a partial withdrawal for education when their child is 18.

    • This initiative ensures forward-looking planning for a girl's education and marriage, yielding substantial long-term benefits.

  • 9. The Kisan Vikas Patra (KVP)

    • Government-backed scheme issued by post offices.

    • Investments might double after a certain time at a 7.5% annual interest rate.

    • No tax benefit, but premature withdrawal is allowed under specified conditions.

    • It is particularly convenient for rural and semi-urban investors seeking secure and long-term investments.

  • 10. The Mahila Samman Savings Certificate

    • For women and girls available with a lock-in period of 2 years.

    • Provides a rate of 7.5% p.a., compounded quarterly and paid at maturity.

    • The highest investment cap is ₹2 Lakh per account holder.

    • This recently launched scheme allows women to generate short-term savings with assured returns.

  • 11. Child Plans

    • These are investment-cum-insurance plans for a child's future.

    • They pay lump sums either at the policy maturity or on the policyholder's early death.

    • Premium waivers ensure the plan continues in force even if the insured parent passes away.

    • These plans ensure there is no break in funding a child's education and future expenses.

  • 12. Pension Plans

    • Long-term contracts that provide retirement income through annuities or deferred benefits.

    • You will have the options of lump sums or regular payments after retirement.

    • They can have life insurance benefits, subject to the chosen plan.

    • Annuities give economic security and peace of mind in the years after retirement.

  • 13. National Pension System (NPS)

    • A voluntary retirement scheme governed by the Pension Fund Regulatory and Development Authority (PFRDA).

    • Offers exposure to debt and equity, as well as partial tax benefits5 of up to ₹2 Lakh.

    • Withdrawals at retirement are half-tax-free; annuity is taxable.

    • NPS is most appropriate for systematic investors seeking a low-cost, diversified retirement scheme.

  • 14. The Atal Pension Yojana (APY)

    • Government scheme for unorganised sector workers aged 18 to 40.

    • Pays a monthly fixed pension of ₹1,000 to ₹5,000 at the age of 60 years.

    • The government can provide co-contributions to qualifying low-income subscribers.

    • It promotes pension coverage in the informal sector, providing financial protection after retirement.

  • 15. Fixed Deposits (FDs)

    • Banks and NBFCs provide fixed returns for a particular tenure.

    • Interest rate ranges between 6% to 8% p.a., and tenors up to 10 years.

    • FDs are also perceived as low-risk and are insured up to ₹5 Lakh under Deposit Insurance and Credit Guarantee Corporation (DICVG).

    • They are highly liquid and can be chosen for parking surplus funds without risking capital.

  • 16. Recurring Deposits (RDs)

    • Recurring Deposits are appropriate for salaried workers who prefer regular savings.

    • They allow you to put a fixed amount every month for a specific period, usually between 6 months and 10 years.

    • Interest is compounded quarterly and paid at maturity, yielding cumulative returns.

    • Recurring Deposits (RDs) are an efficient way to develop the savings habit and construct a short-term goal fund, e.g., for foreign travel or buying gadgets.

    • Premature withdrawal is permitted but is subject to a penalty.

  • 17. Equity Mutual Funds

    • Equity mutual funds invest more than 65% in equities of market capitalisation companies.

    • They are handled by experienced fund managers, hence can be accessed by investors lacking firsthand market experience.

    • Whereas they provide high potential benefits, these are also exposed to risk and market uncertainty.

    • Tools like SIPs (Systematic Investment Plans) offer inexpensive and disciplined investment.

    • Tax efficiency and long-term capital appreciation make them popular with young investors.

  • 18. Direct Equities

    • Direct equities investment involves the purchase of shares of listed firms from stock exchanges like the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE).

    • It has the potential to yield high returns in terms of capital appreciation and dividends with high risk.

    • This involves understanding financial statements, corporate fundamentals, and market timing.

    • Although it may be lucrative, it's well-suited for active or veteran investors.

    • However, you can diversify by investing across themes and sectors to better manage risk.

  • 19. Exchange Traded Funds (ETFs)

    • ETFs are shares of mutual funds sold like stocks on stock exchanges, offering the best of both.

    • They track indices (such as Nifty 50 or Sensex) or commodities (such as gold or silver), and provide passive and transparent investing.

    • Expense rates are lower than actively managed funds, and thus ETFs are cost-effective.

    • They offer liquidity, diversification, and flexibility to enter or exit at any time throughout trading hours.

    • It can be more appropriate for investors who want to gain broader market exposure with little active management.

  • 20. Physical Gold

    • Gold has served as a conventional hedge against currency depreciation and inflation in India.

    • It is normally bought in the form of jewellery, coins, or bars, especially during wedding and festival seasons.

    • They are subjected to price appreciation only, and this is based on international economic conditions.

    • It remains a favoured long-term asset for wealth preservation.

  • 21. Sovereign Gold Bonds (SGBs)

    • SGBs provide a fresh method of investing in gold, without the inconvenience of storage.

    • They are government securities denominated in grams of gold provided by the RBI.

    • Besides gold price appreciation, they earn an annual interest of 2.5%, paid semi-annually.

    • They have an 8-year maturity with redemption at an early date after 5 years.

    • Capital gains when the SGB matures are tax-free, thereby making SGBs a superior substitute for physical gold.

  • 22. Real Estate and REITs

    • Real estate remains a desirable investment for long-term capital growth and rental income.

    • However, its high initial investment and the need for continuous maintenance and legal expenses are drawbacks.

    • Real Estate Investment Trusts (REITs) solve these issues by offering fractional ownership of commercial property.

    • They provide liquidity, regular dividend cash flow, and are priced like stocks.

    • REITs provide investors with access to high-quality real estate with low entry barriers and diversification.

  • 23. Debt Mutual Funds

    • These investments invest money in fixed-income instruments such as government bonds, corporate debentures, and treasury bills.

    • They provide higher yields than savings accounts and FDs, particularly in declining interest rate environments.

    • Various types, such as liquid funds, short-term funds, or gilt funds, are appropriate for different investment horizons and risk appetites.

    • Debt funds are tax-efficient if invested for more than 3 years due to indexation benefits.

    • They are appropriate for conservative investors seeking stability with modest returns.

  • 24. Hybrid Funds

    • Hybrid mutual funds combine equity and debt into one portfolio and thus seek to balance future returns and possible risk.

    • They can be regarded as more appropriate for moderate investors who want a balanced strategy between aggressive and conservative investments.

    • They consist of aggressive hybrid (greater equity), conservative hybrid (greater debt), and dynamic asset allocation funds.

    • The equity component enhances returns, and debt protects against volatility.

    • They are often used as a starting point for novice investors investing in equity markets.

  • 25. Bonds

    • Bonds are fixed-income instruments in which funds are loaned to the issuers (governments/companies) in exchange for regular interest.

    • These may be categorised as short-term or long-term investments, each having a varying level of credit risk depending on the issuer.

    • Government bonds are safest, but corporate bonds may provide higher returns, but at greater risk.

    • Bond markets also enable pre-maturity trading, thereby providing the scope for capital appreciation.

    • Bonds diversify a portfolio and provide a certain income, particularly for retirees.

  • 26. Silver ETFs

    • Silver ETFs mirror the price of physical silver and are listed on exchanges such as ordinary stocks.

    • They enable investors to gain exposure to silver without having to store it physically.

    • Refunds are based on international silver prices, which are established by industrial consumption and current market patterns.

    • These ETFs provide a means of diversifying in commodities and hedging inflation.

    • These investment opportunities can be suitable for high to moderate risk investors who want to diversify their investment portfolio.

  • 27. Infrastructure Investment Trusts (InvITs)

    • InvITs function similarly to mutual funds, but for infrastructure projects like roads, power plants, and telecom towers.

    • They earn their revenue from tolls, rents, or service charges and distribute part of their revenue as dividends.

    • SEBI-approved and listed on the exchanges, InvITs provide transparency and liquidity.

    • They are suitable for income-focused investors who want exposure to the infrastructure market without taking physical property.

    • They align growth potential with ongoing income and enable diversification of portfolio exposure.

  • 28. Treasury Bills

    • Treasury Bills (T-Bills) are short-term government securities launched by the Government of India to address short-term liquidity.

    • They are bought at a discount and redeemed at their face value, without the payment of normal interest.

    • Liquid and safe, they are widely utilised by corporations, banks, and institutions to invest excess funds. They can be invested in by retail investors using the RBI Retail Direct or mutual fund schemes.

    • They are a suitable low-risk option for short-term investment of funds.

  • 29. RBI Floating Rate Savings Bonds

    • These 7-year bonds carry an interest rate that is reset semi-annually at the prevailing rate of 8.05% p.a.

    • Interest is paid every six months and paid directly into the investor's bank account.

    • While the interest earned is taxable, government assistance ensures that the capital is protected.

    • They are not tradable and not transferable, limiting liquidity but ensuring dedicated savings.

    • These may be suitable for clients anticipating assured returns with interest rate fluctuations.

  • 30. Post Office Monthly Income Scheme (POMIS)

    • A secure savings plan that accrues monthly interest income at 7.4% p.a.

    • The maximum investment is ₹9 lakh for a single account and ₹15 lakh in joint accounts.

    • The plan has a lock-in period of 5 years, and the amount of principal is repaid at maturity.

    • It can be more suitable for conservative investors and retirees who require fixed monthly returns with lower risk.

    • POMIS is backed by the Government of India, which gives stability and security.

What Are the Types of Investment Plans?

Before making the bigger investment decision, it is important to know the different types of investment plans and understand the features, risk factors, and tax-saving benefits.

High-Risk Investments

High-risk investments have a high probability of price fluctuations during volatile market conditions. In addition, the investment value can be affected to a great extent if there is a political or economic change globally. However, given the high risks involved, these high-risk investments can yield higher returns over the long term.

Therefore, high-risk investments may be a preferable option if you have a high-risk appetite and are looking for long-term capital gains.

  • Direct Equity - Investing in direct equity, if made on the right stocks, can provide higher returns over the long term. The returns on equity investment are based on factors such as the company's financial condition, industry, investment decisions, risk management strategies, etc. Therefore, analysing the company profile is important to invest in their stocks for high returns.
    As the risk involved increases, you can diversify your portfolio across different industries to ensure the investment value is not greatly affected. You can also analyse your risk profile and use the stop-loss method to secure your investment. The stop-loss method will sell all your orders when the stock price reaches a certain value.
    However, knowing the financial market and the functioning of the BSE and NSE, factors that affect the investment value, and the impact is essential to ascertain higher returns over the investment tenure.
  • Equity Mutual Funds - If you have a higher risk appetite and lack the knowledge to invest in the equity market, equity mutual funds may be a preferable option.
    In a mutual fund, you can choose the fund options that you want to invest in based on your risk profile, and the Asset Management Company will manage your investments and make the necessary decisions timely. You can discuss investment decisions with your fund manager and revise your portfolio anytime.
    The fund options can have a combination of different stocks, and in equity mutual funds, the major proportion is based on high-risk stocks. Some of the common equity funds for long-term best returns are the Large Cap, Mid Cap, Flexi Cap, ELSS (Equity Linked Savings Scheme), etc.

Medium-Risk Investments

The medium-risk investments offer balanced returns. It involves a fair or equal combination of the high-risk and the low-risk fund options. Therefore, the diversified portfolio balances growth and secures your investment and financial goals from the highly volatile financial market.

  • Hybrid Funds - The hybrid funds in the equity market combine the high-risk equity fund option and the low-risk debt fund option. Therefore, even if there is a greater impact on the investment value due to global economic changes, the investment value remains stable due to an equal proportion of the investment in the debt funds.
  • Unit Linked Insurance Plan (ULIP Plan) - The ULIP plan is a comprehensive life insurance policy that provides a life cover and the opportunity to invest in the financial market. Thus, it provides financial security to your family in your absence and the option for wealth creation.
    The ULIP policy provides different fund options for investors, such as equity, debt, and hybrid funds for investors who can afford high-risk, medium-risk, and low-risk investors. In addition, the ULIP plan allows switching between fund options during extreme financial conditions.
    Therefore, if a volatile market condition affects your investment value, you can switch from the equity fund option to the low-risk debt fund option. 

Low-Risk Investments

Low-risk investments provide reasonable and consistent returns over the investment tenure and are not drastically affected by market conditions. Therefore, bears less risk compared to high-risk and medium-risk investments.

  • Debt Mutual Funds - A debt fund is a mutual fund that will invest your money in fixed-income instruments such as corporate debt securities, money market instruments, and corporate and Government bonds. They are less volatile, provide stable returns and are highly liquid.
  • Money market instruments - Money market financial instruments are low-risk investments with an investment tenure of less than a year. The Government and the companies use it to raise short-term debt for their financial needs. They are listed both in the NSE and BSE stock exchanges.
    Some of the common money market instruments are commercial papers, treasury bills, certificates of deposits, etc., The RBI revises the interest rates, and as the maturity is less than a year, the risk is comparatively lower.
  • Gold - Gold is considered a beneficial investment as it protects against inflation, is easy to buy and sell, and has a stable price. It has been increasing in value over recent years. As an alternative to possessing physical gold, you can invest in the Sovereign Gold Bonds issued by the RBI. At maturity, you can redeem these bonds and receive the cash benefit.
  • Real Estate - Real estate is another investment option that ensures value appreciation over the long term if invested in the right property. In addition, you can ascertain sufficient cash flow through a regular rental income. It is a safe investment option as its value does not fluctuate frequently based on financial market conditions.
  • Fixed Maturity Plan (FMP) - It is a debt fund instrument that invests the amount in fixed income instruments such as bonds, certificates of deposits, etc., to ensure consistent returns over the investment period. It has a fixed tenure and minimum exposure to interest rate risks.
  • Public Provident Fund (PPF) - PPF is a long-term investment plan introduced by the Government. The investors have to deposit a certain amount regularly into the PPF account. The investment amount will earn interest over the investment period. The accumulated fund and the interests earned will be provided as the maturity benefit at the end of the policy tenure. The lock-in period for the investment is 15 years. The current interest rate is 7.1%.
  • National Pension Scheme (NPS) - The NPS is a pension scheme introduced by the Government for Central and State Government employees and employees in the organised and unorganised sectors. The contribution is 10% of the salary for other employees and 14% for Government employees.
    The contribution to this scheme has to be made by the employees and the employers equally. The contribution made to the NPS is invested in the financial securities and provides market-linked returns at maturity. As the NPS is customisable, it is considered one of the low-risk, high-return investments.
    When you retire, you can withdraw up to 60% of the accumulated fund. The remaining 40% of the fund should be invested in an annuity plan for a monthly income after retirement.
  • Senior Citizens Savings Scheme (SCSS) - Senior Citizens Savings Scheme is an investment plan for senior citizens who want to invest their retirement funds. The interest earned from the SCSS will be credited to your savings account maintained at the post office. The lock-in period is 5 years. The investment period can be extended for 3 years. The minimum and maximum investments applicable are ₹1000 and ₹1.5 Lakh. The current interest rate is 7.4%.
  •  Sukanya Samriddhi Yojana (SSY) - The Sukanya Samriddhi Yojana is one of the best investment plans to secure the life of your girl children. You can open it for up to two of your girl children who are less than 10 years old.
    The investment period is 21 years from the date of opening the account or after she attains the age of 18 when the girl child gets married. However, you will have to contribute to the account for 15 years. The current interest rate is 7.6%.
  • National Savings Certificate (NSC) - NSC is a scheme introduced by the Government that provides guaranteed returns. The interest is compounded annually and payable at the end of the policy tenure. The current interest rate is 6.8% per annum and the lock-in period is 5 years.
  • Bank Fixed Deposit (FD) - Fixed Deposit is one of the best investment plans for conservative investors. You can choose the investment amount, investment period, and interest payout frequency.
    In addition, you can withdraw funds from the FDs before the maturity date, avail of loans, and reinvest the interest earned to accumulate a huge fund at the end of the investment tenure. The interest rate ranges between 3% and 7.5%.
  • Bank Recurring Deposit (RD) - It is a bank term deposit that lets you make deposits regularly and earn returns on the same. It is a flexible investment option for those who do not have a lump sum to invest for the long term.
  • Post Office Time Deposit - Post Office Time Deposits are similar to Fixed Deposits offered by banks. You can deposit a certain amount for short or medium terms, such as between 1 and 5 years, to earn interest on the same. It can provide interests higher than that of bank FDs.  

Understanding Risk and Return in Investment Plans

Investing is basically to bear risk and return to achieve financial goals. Every investment has some scope of risk, but understanding the relationship between risk and probable returns can guide one in making investment decisions.

 

 Types of Investment Risks

 

  • Market Risk:

    This risk arises due to a change in the stock market, commodity market, and real estate markets.

    Stocks, mutual funds, and exchange-traded funds get impacted by market fluctuations.

  • Credit Risk:

    Risk associated with possible default of the companies or organizations that issues bonds or other debt papers.

    Government-backed securities such as PPF, EPF, and RBI Bonds carry very low credit risk.

  • Inflation Risk:

    The possibility that returns will not keep pace with inflation, thereby reducing purchasing power.

    Fixed-income investments like FDs, RDs, and PPF are more susceptible to inflation risk.

  • Liquidity Risk:

    The inability to convert an asset into cash without a loss.

    Real estate, pension plans, and tax-saving FDs carry high liquidity risk.

  • Interest Rate Risk:

    The effect of fluctuating interest rates on investments.

    Debt funds, bonds, and fixed deposits are interest rate sensitive.

     

Understanding Return Potential

Investment returns can be broadly categorized into:
 

  • Fixed Returns: FDs, RDs, government bonds, and small savings schemes provide assured interest rates.
  • Market-linked Returns2: Equity, mutual funds, ETFs, ULIPs, and real estate have a higher return potential but are accompanied by market risks.
  • Tax-free5 Returns: PPF, EPF, SSY, and some government bonds provide tax-exempt maturity benefits, which add to the net returns.
  • Investment Right Choice Based on Risk Appetite

Choose the investment plan based on your risk appetite. Here’s the comparison of the risk level for the different types of investment options.

Risk Level

Suitable Investments

Low Risk

PPF, FD, NSC, SCSS, RBI Bonds, Debt Funds

Moderate Risk

Balanced Mutual Funds, ULIPs, Tax-Saving FDs, NPS

High Risk

Direct Equities, ELSS, ETFs, Real Estate, InvITs

A well-diversified portfolio ensures risk is spread effectively while optimizing returns. Aligning investments with financial goals and risk tolerance is key to building a strong investment strategy.

 

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Factors To Consider While Choosing Investment Plans

Before choosing an investment plan in India, you must consider certain factors. It will help in making the right financial decision.

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    Returns on investment

    Return on investment is the financial benefit from the investment plan against its cost. Therefore, evaluating the returns on investment and the factors that affect the returns is important to ensure you benefit from the investment scheme as expected.

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    Risk

    Investment plans based on market-linked returns involve a risk factor. For example, an investment plan with high returns, such as direct equity, involves increased risks. A slight change in the market conditions due to political or economic factors can affect the price of financial securities to a great extent lowering their investment value. Therefore, it is important to consider the risk factor associated with the investment scheme and ensure it is affordable for you, considering your family's financial commitments.

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    Flexibility

    Flexibility is a crucial factor in considering investment plans. For example, the investment scheme should have a flexible premium paying mode and frequency, be liquid enough to manage emergencies, have options to choose between high-risk and low-risk fund options, etc., 

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    Cost

    If you regularly invest in an investment plan, you should ensure that the cost is affordable. It should not affect your routine financial expenses and future financial commitments. Making a monthly financial budget and a long-term financial plan, including the financial goals and the investment objectives, will help invest in the financial products comfortably. 

Tax benefits5 with Investment Plans

     

  • Investments in schemes such as PPF, ELSS, ULIPs, NSC, and 5-Year Tax Saver FDs are eligible for deductions under Section 80C, to a maximum of ₹1.5 Lakh per year.
  • Contribution to NPS is deductible under Section 80CCD(1B) by a further ₹50,000.

  • Benefits of maturity to insurance-linked products such as ULIPs are tax-exempt under Section 10(10D) if specific conditions are fulfilled. For ULIP policies, maturity income will be taxable if annual aggregate premium exceeds ₹2.5 Lakh in a financial year.

  • Interest accrued on SCSS, NSC, and FDs is tax-deductible unless exempted within the exemption limit.

These tax benefits5 may help you save on taxes as you plan your future financially.

Why should you invest?


You must have sufficient financial resources to secure your future and the future of your loved ones.

While your savings can help manage an emergency or accomplish a short-term financial goal, they cannot assist in fulfilling your long-term financial goals.

Achieving long-term financial goals requires adequate investment planning considering the inflation rate and future financial needs for wealth creation. Moreover, it requires a systematic investment for multiplying and accumulating your money in the long term.

Therefore, investing in different investment plans and diversifying the portfolio can utilise your income maximally for securing your future by accumulating during the long term.


When Should You Start Investing in an Investment Plan?


Investments in financial products and their related returns are based on a timeline. Therefore, the longer the investment is made, the higher the returns.

Before you decide on the best investment plan with high returns, investment tenure, and the time you want to start investing, you must find the timelines required to accomplish your specific financial goals and the funds required. Then, based on these inputs, you can find the investment period, amount, and tenure.

However, the earlier you start investing, the earlier you develop the discipline to invest regularly, and the higher the financial benefits you can conveniently accumulate over the long term.


How To Choose the Investment Plan?


Financial institutions in India provide the best investment plans for the different categories of investors.

As the investment options in India are many, you should know how to choose the right investment plan for your financial needs. Here are a few steps to help you best in this regard.

  • 01.

    Analyse your risk appetite and short-term and long-term financial goals.

  • 02.

    Find the timelines to accomplish the short-term and long-term financial goals.

  • 03.

    Make a monthly financial budget, including routine grocery expenses, travel, clothing, and other miscellaneous expenses. Then, allocate a certain amount of funds to invest in the different investment plans for the long term.

  • 04.

    Based on your future financial goals and the timelines to accomplish them, decide on the type of investment plan considering the risk involved and the applicable returns. 

  • 05.

    Compare the best investment plans in India, considering their features, benefits, and cost to determine the most suitable investment plans for your financial needs.

  • 06.

    Create a diversified portfolio, including multiple investment plans with different risk profiles to ensure sustainable returns. 

  • 07.

    Revise the investment plans periodically based on the changing financial needs. 

  • Best Investment Plans for the Long Term

    Apart from considering the features, benefits, risks, and returns, it is equally important to find the right investment period for your financial goals.

    If you target achieving financial goals such as paying for your child's higher education, starting a new business, etc., the investment period is generally for the long term. For example, it can be for a term of 10 years, 12 years, etc.

    Investments for achieving long-term goals can bear a high risk as the impact due to short-term volatility will get negated during the long term.

    Here are a few long-term investment plans.

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      Direct equity

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      Equity Mutual Funds

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      Gold

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      Real Estate

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      Small savings schemes, such as PPF (Public Provident Fund), SCSS (Senior Citizen Savings Scheme), Sukanya Samriddhi Yojana, etc., 

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      National Pension Scheme

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      Unit Linked Insurance Plan (ULIP Plan)

  • Best Investment Plans for the Medium Term

    Medium-term financial goals are planned for after 3-5 years. It can be paying the down payment for your dream house or car, planning a wedding, etc. Investments for the medium term should have a good balance between risk and returns to ensure consistent returns.

    Here are a few investment options for the medium-term investment plan.

    • Hybrid Funds

    • Debt Mutual Funds

    • National Savings Certificate

    • Post Office Time Deposit 

  • Best Investment Options for the Short Term

    Short-term investment plans are liquidated within 1 to 3 years. However, the investment period can sometimes extend to 5 years based on revised investment decisions.

    The short-term investment plans have a lower risk profile, are highly liquid, and provide considerable returns. Some of the common objectives of short-term investment plans are for planning a vacation, receiving returns on idle funds, etc.,

    There are various short-term investment options. It would help if you analysed your purpose of investing to choose the best short-term investment plan.

    Here are a few short-term investment plans for the different investment tenures.

 

1 year

3 years

5 years

Fixed Deposits

Equity Linked Savings Schemes

Liquid funds

Recurring Deposits

Fixed Maturity Plan

Large Cap Mutual Fund

Debt Mutual Funds

Liquid Funds

Post Office Time Deposit

Arbitrage Funds

Fixed Deposit

ULIP Plan

Fixed Maturity Plan

Arbitrage funds

Post Office Monthly Income Scheme

Post Office Deposits

Gold

Bank Fixed Deposit and Recurring Deposit

Money Market Instruments

Short term and Ultra Short-term fund options

Arbitrage Funds



  • Which Investment Plan Suits Your Financial Needs in India?

    Different investment options for various risk profiles and investment tenures exist in India. Therefore, choosing the best investment plan for your individual financial needs should be based on the following factors:

    • Risk appetite

    • Financial goals

    • Affordability

    • The required return on investment

    • Required investment period


Documents Required to Buy Investment Plans


Here is a detail about the documents required to buy investment plans in India.

Identity Proof Age Proof Address Proof Income Proof

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Aadhar Card

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PAN card

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Voter ID

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Passport

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Birth Certificate

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PAN Card

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Aadhaar Card

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Voter ID

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Passport

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Passport

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Driving License

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Aadhaar Card

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Voter ID

  • Salaried individuals

    • Latest Form 16

    • Bank statement for the last 3 months

    • ITR document for the last two years

  • Self-employed individuals

    • Form 26AS

    • Computation of income and ITR (Income Tax Returns) for the last 2 years not filed in the same year. If the computation of income is not possible, ITR (Income Tax Returns) for the last 3 years not filed in the same year.

    • Profit and Loss account and Certified Audited balance sheet.

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Frequently Asked Questions

What are some good investment options in India?

Some of the good investment options in India are:    

  1. Direct equity
  2. Equity Mutual Funds
  3. Arbitrage Funds
  4. Debt Mutual Funds
  5. Post Office Schemes
  6. Money Market Instruments
  7. Real Estate
  8. Gold

Which investment gives the highest return?

Equity investments can give the highest return in the long term. However, the investment involves high risk considering the market volatility and the global economic and political conditions.

How do you withdraw from investments?

Every investment plan has defined terms and conditions for the withdrawal. For example, partial withdrawal from the ULIP plan is permissible after the 5-year lock-in period. The funds withdrawn will be credited to the investor's account after successfully verifying the withdrawal request.

How can I start investing in my early 20s?

In your early 20s, you will earn more and be less bound by family commitments. Therefore, you can diversify your portfolio with a higher proportion of equity investments. The portfolio can include other investment options such as hybrid and debt mutual funds, real estate, etc. However, the investment plan should be based on your income, financial commitments, and long-term goals. 

How can I save money from my salary?

You can save money from your salary by making a detailed financial plan. Firstly, you need to make a monthly budget, including the regular grocery expenses, clothing, medicines, etc., Secondly, find your short-term and long-term financial goals and the timelines to achieve them. Thirdly, find the right investment plans and set aside the required amount for saving and investing for the future by investing in them. Thirdly, ensure to stay within the budget and invest in the chosen investment plan regularly. And finally, revise your investment plan and increase your regular investment based on your salary increments.

Which is the best monthly investment plan?

The best monthly investment plan is based on your financial goals, risk appetite, and affordability. For example, if you are looking for high returns over the long term, you can invest in Equity Mutual Funds, providing monthly investment options. You can also opt for the Unit Linked Insurance Plan with monthly premium payment options. And, if you are a conservative investor seeking investments for retirement needs, you can invest in the PPF (Public Provident Fund) monthly. 

Disclaimer  

  • 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.

  • Param Raksha Life Pro + is designed for combination of benefits of following individual and separate products named (1) Tata AIA Smart Sampoorna Raksha Supreme Unit Linked, Non-Participating Individual Life Insurance Plan (UIN: 110L179V02) and (2) Tata AIA Vitality Protect Advance - A Non-Linked, Non- Participating Individual Health Product (UIN: 110N178V01).
  • These products are also available for sale individually without the combination offered/ suggested. This benefit illustration is the arithmetic combination and chronological listing of combined benefits of individual products. The customer is advised to refer the detailed sales brochure of respective individual products mentioned herein before concluding sale.
  • Tata AIA Premier SIP is a combination of the Tata AIA Smart SIP, a non-participating, unit-linked, individual life insurance savings plan (UIN: 110L174V01), and Tata AIA Vitality Protect Advance, an individual, non-linked, non-participating health insurance plan (UIN: 110N178V01)
  • 1Tax benefits of up to ₹46,800 u/s 80C is calculated at highest tax slab rate of 31.20% (including cess excluding surcharge) on life insurance premium paid of ₹1,50,000 as per old tax regime. Tax benefits under the policy are subject to conditions laid under Section 80C, 80D,10(10D), 115BAC and other applicable provisions of the Income Tax Act,1961. Good and Service tax and Cess, if any will be charged extra as per prevailing rates. The Tax-Free income is subject to conditions specified under section 10(10D) and other applicable provisions of the Income Tax Act,1961. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
  • 2Market-linked returns are subject to market risks and terms & conditions of the product. The assumed rate of returns or illustrated amount may not be guaranteed and depends on market fluctuations.
  • 35-year computed NAV for Multi Cap Fund as of Mar 2025. Other funds are also available. Benchmark of this fund is S&P BSE 200.
  • ©2024 Morningstar. All rights reserved. The Morningstar name is a registered trademark of Morningstar, Inc. in India and other jurisdictions. The information contained here: (1) includes the proprietary information of Morningstar, Inc. and its affiliates, including, without limitation, Morningstar India Private Limited (“Morningstar”); (2) may not be copied, redistributed or used, by any means, in whole or in part, without the prior, written consent of Morningstar; (3) is not warranted to be complete, accurate or timely; and (4) may be drawn from data published on various dates and procured from various sources and (5) shall not be construed as an offer to buy or sell any security or other investment vehicle. Neither Morningstar, Inc. nor any of its affiliates (including, without limitation, Morningstar) nor any of their officers, directors, employees, associates or agents shall be responsible or liable for any trading decisions, damages or other losses resulting directly or indirectly from the information.  
  • 4All funds open for new business which have completed 5 years since inception are rated 4 star or 5 star by Morningstar as of December 2024
  • 5Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfillment of conditions stipulated therein. For ULIP policies, maturity income will be taxable if annual aggregate premium exceeds ₹2.5 Lakh in a financial year. 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 on this site. Please consult your own tax consultant to know the tax benefits available to you.
  • This product is underwritten by Tata AIA Life Insurance Company Ltd.   
  • Tata AIA Life Insurance Company Limited is only the name of the Insurance Company & Tata AIA Smart Sampoorna Raksha Supreme, Tata AIA Smart SIP are only the names of the Unit Linked Life Insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns
  • The fund is managed by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • 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.
  • Insurance cover is available under this product.
  • 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.
  • For more details on risk factors, terms and conditions please read Sales Brochure carefully before concluding a sale. The precise terms and condition of this plan are specified in the Policy Contract.
  • Past performance is not indicative of future performance. Returns are calculated on an absolute basis for a period of less than (or equal to) a year, with reinvestment of dividends (if any).
  • Investments 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
  • Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. Please know the associated risks and the applicable charges, from your Insurance Agent or Intermediary or Policy Document issued by the Insurance Company.
  • Various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. The underlying Fund's NAV will be affected by interest rates and the performance of the underlying stocks.
  • The performance of the managed portfolios and funds is not guaranteed, and the value may increase or decrease in accordance with the future experience of the managed portfolios and funds.
  • Premium paid in the Unit Linked Life Insurance Policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the Insured is responsible for his/her decisions
  • Buying a life insurance policy is a long-term commitment. An early termination of the policy usually involves high costs and the Surrender Value payable may be less than the total premiums paid.