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List of Best Investment Options in India

Last updated: January 29, 2020 | by 152 Comments

We (Indians) always try to maintain a reasonably very high savings rate (the national saving rate is about 30 per cent of GDP). Even a daily wage laborer who earns say Rs 300 per day will try to save some money for the future. But are we investing these savings in the right and best Investment Options (financial products) is a billion dollar question.

Unfortunately, in India a major portion of these savings gets invested in unproductive assets like Gold or low-yielding bank fixed deposits or traditional life insurance policies.

Investments in Land (property) & gold together can easily make up around 70% of all household assets. Investments in property & gold are perceived as ‘safe bets’ in India.  Its allure is amplified by the attraction of being safe conduits (avenues) to stash away black money as well as avoid taxes.

We seem to be entrapped in a low-level equilibrium. The distribution of savings among various asset classes is rarely seen with most of the households.

latest Savings and investment patters in India 2018 indian household savings in financial assets Bank deposits Life insurance Shares Stocks Mutual Funds Liabilities pic

Problems of access to various investment options (financial instruments) and ignorance about the available investment avenues can be attributed as the main reasons for this in-equilibrium.

But things are changing for the better. The gap between financial savings and Physical assets is slowly shrinking, which is a very good sign. Financial inclusion is taking the centre stage. More no of bank accounts are being opened and operated.

The young population wants to invest in new-age financial products and not just in fixed deposits. The Assets Under Management (AUM) of mutual fund houses have been steadily increasing in the last 4 to 5 years.

In this post, let us list out the possible Investment options that are available in India. Let’s discuss, what are the best possible investment options for short-term? What are the best investment Schemes for long-term goals? What are the best tax saving investment options? 

List of Investment Options in India 2020-21

As discussed earlier, the major portion of Indian household savings are being invested in the below investment options;

  • Fixed deposits
  • Gold
  • Land & property
  • Chit Funds

So, do we really have only these investment options to invest our savings? Let’s list out all the possible investment options that are available in India;

How to shortlist or select best investment options for 2020 & beyond?

Before selecting any financial product, kindly set your Financial goal(s). Your goals should be realistic, measurable, clear and attainable. You can then shortlist the right investment options by considering the below factors; (Factors to consider before investing….)

Financial Product side factors:

  • The features, rules, guidelines, terms & conditions of a financial product (an investment option) should be simple, clear& easy to understand.
  • The expenses, fees, loads and investment charges should be reasonable.
  • It should be reasonably liquid & flexible.
  • It’s great if it is a tax efficient investment option.

Investor side factors:

  • Your age & financial profile.
  • The time-frame (investment horizon) – Short, medium and long-term.
  • Your investment objective(s) & financial goal(s).
  • Your expected rate of return (Kindly give importance to real rate of return).
  • Type of investor : Do-It-Yourself or depend on intermediaries (agent/advisor) 

Best Investment options avenues plans in India pic

Best Saving options to accumulate Emergency Fund 2020-21

  • Bank Fixed Deposits (preferably eFDs / online FDs)
  • Sweep-in Savings Bank Accounts (Auto-sweep accounts)
  • Liquid Debt Mutual Fund Schemes
  • Arbitrage Mutual Funds
  • Cash-in-hand 🙂 

Best Investment or Saving Options for short-term in 2020-21

  • Short-term Debt Mutual Fund Schemes
  • Bank Fixed Deposits
  • Recurring Deposits 

Best Investment options for Long-term Goals  2020 & beyond

Best Investment options for Medium-term Goals in 2020-21

Best Investment options to get periodic fixed income from 2020 & beyond

  • Tax Free Bonds
  • Post Office Monthly Income Scheme (Maximum investment limit is INR 4.5 lakhs in single account and INR 9 lakhs in joint account)
  • Post Office Senior Citizens Savings Scheme (if you are above 60 years. Maximum investment limit is Rs 15 Lakh. Interest amount paid quarterly.)
  • Bank or Post office Fixed Deposits.
  • Debt Mutual Funds – Dividend option
  • Monthly Income Plans (MIPs) of Mutual Fund Schemes – Dividend option (beneficial if you are in 30% tax slab)
  • Rental income from Real estate property investments
  • Secured Non-Convertible Debentures (NCD – Payment option) (debentures can be best suited for low tax bracket individuals) 

Best tax saving Investment options for long-term 2020-21

Our culture and tradition encourages us to save more. We generally tend to save more for goals such as Kid’s education or a home purchase and less for retirement, may be because we are more likely to expect our retirement years to be financed by income of other family members (children).

We are also extremely risk averse and generally place greater importance on safety than rate of return on investments. I do not believe in classifying investors as conservative, moderate & aggressive. If you would like to accumulate sufficient corpus for a long-term goal, you may have to take calculated risk and invest in right financial product(s) which can beat inflation & give better tax-adjusted returns. If your investment horizon is short, kindly give high priority to safety & liquidity and do not chase returns aggressively.

Your investment portfolio should have a fair mix of both conservative as well as aggressive investment options. Kindly try to maintain an ideal asset allocation.

If you would like to know more information or discuss about any of the above investment option(s), kindly leave a comment. Cheers!

Kindly read my latest article : Features & Snapshot of 22 most popular Investment Options in India, all in one place!

Continue reading : are-there-any-investment-options-which-are-really-the-best-pic

(Image courtesy of fantasista at FreeDigitalPhotos.net)

Sreekanth Reddy:

Sreekanth is the Man behind ReLakhs.com. He is an Independent Certified Financial Planner (CFP), engaged in blogging & property consultancy for the last 11 years through his firm ReLakhs Financial Services . He is not associated with any Financial product / service provider. The main aim of his blog is to "help investors take informed financial decisions." "Please note that the views given in this Blog/Comments Section/Forum are clarifications meant for reference and guidance of the readers to explore further on the topics/queries raised and take informed decisions. These should not be construed as investment advice or legal opinion."

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  • Hi Sreekanth your explanation about savings options is superb. Can you provide your contact mobile number.
    My whatsapp number 94404987**.
    To know about mutual funds

    Reply

  • Hello Srikanth, I am in a dilemma whether to invest in commercial real estate property or existing mutual funds. I am already investing in mutual funds but no exposure to commercial real estate. Which one works better as a long term investment and as a secondary source of income?

    Reply

    • Dear Arun,
      MF and real-estate cant be compared. Both are have their own set of risks.
      Real-estate investment requires out-flow of large sum of money in one go and the expected commercial rentals may or may not be that great in near future considering the pandemic.

      Without understanding/knowing your profile, not fair to give a straight forward answer to your query..

      We can have a detailed discussion (if you wish) in forum section Q&A..

      Reply

  • This article is well explained to plan a diversified investment for the people like me who are going to retire in less than 5 years.Thanks

    Reply

  • Dear Sreekanth,
    I plan to invest money in my Spouse name in Swayamsidha Deposit for women ? What is your opinion in this scheme? The Tenure is only 18M.

    Reply

  • Hi Sreekanth, I Purchase SBI Return money plan….. he said every 3rd year you got 20% money of total policy plan can it is good?

    Reply

  • A very useful article. Really we learn a lot from this article and we can focus
    on saving as well as investments according to our requirement. Please keep it up.

    Reply

  • Nice article, Sreekanth.

    I would also like to mention one more option which is peer-to-peer lending 🙂

    Reply

  • Hi

    I have opted for 8 % of NPS savings from my BASIC pay this year 2018-19 . The dedecution is not started , is it a way to cancel my Option for deduction .

    Please suggest !

    Reply

  • Hi Sreekanth. Good Evening. I appreciate your patience and time to explain every ones query at your best. Really its wonderful.

    Coming to the Point, I want to take a demat account and buy some shares which i am thinking of holding for a very long term. Say more than 15 years. which may be helpful for our retirement / kids education.
    Kindly Suggest.

    Reply

  • Hello Srikanth,
    I have recently got my RD matured and got sum assured of around 2 L.
    I want to use this money for house down payment which I am planning in any time between 1-3 yrs.
    Please help me if I should invest this lumpsum to FD or any Short/medium term DEBT fund.
    If I invest in FD problem is less return post tax deduction
    Also if I invest in Debt fund issue is there also I need to pay tax if I withdraw it before 3 yrs.

    Reply

  • sir, I have around 1.5 lakh in my PF account. for the last two years Iam not working in any company. Iam planning to transfer the PF amount to NPS account. Is it a good option. kindly suggest.

    Reply

  • Hi Shreekanth,

    I am 30 year old and not taking tobaco in any form. Yearly income around 6 lacs. Working in Pvt. IT company. My wife is housewife but sometimes it works from home so her income is not fixed. My wife and my 1 year daughter are dependent on me.

    my investments are,
    RD: 24000 per yeear
    Health/Medical Insurance of New India(Dont know name of plan) covers Me, my wife and daughter value 1 lac: around 4000 premium per year
    LIC of my wife(dont remember name of plan): 14000 per year
    PPF: Investing around 50,000 per year
    Sukanya Yojna: Investing around 20,000 per year

    I am planning to buy Term insurance for myself of 1 cr. Can you please suggest me which one is good? I am new to this things. I have seen Aegon Religare as term insurance but my father insist to go with SBI Life or LIC as Aegon Religare is private ltd. they dont trust that much. I am confused? Can you please suggest which is best term plan to go SBI Life/HDFC/ICICI/LIC ? Have seen online reviews some of the suggested HDFC life term insurance for 40 years. Is it okay to go with it or should I go for SBI term or LIC term? please suggest.

    Can I go for refundable term insurance or non-refundable term? I have seen for refundable term premium is almost double and term is for max. 60 years while for non refundable I can opt for 75 years.

    Also I want to invest 5000 in each SIP and ELSS can you please suggest names which one should I go for?

    Thanks
    Peter

    Reply

  • Hi Shreekanth,
    am a new investor and want to invest in mutual fund. Can u pls suggest me some good option after demonetization which will give me good returns for long period say some for 3 years.I want to buy home.

    Reply

  • I am prospective investor and was looking for some radical investment options. Can you suggest some? Recently heard about P2P lending and was thinking of investing some amount.

    Reply

  • Hi Sreekanth,

    Please let us know the difference between Liquid debt mutual fund and Monthly Income Plans (MIPs) of Mutual Fund Schemes – Dividend option.
    If I choose monthly income plan, is it that we get some amount monthly? I dont want monthly amount now (as I am salaried), want to invest in debt products.
    Also want to invest in short term product, as I have money which I need for construction of house in few months.

    Thanks,
    Sriharsha

    Reply

    • Dear Sriharsha,
      Suggest you to go through this article – Types of Debt funds.
      In any Mutual fund scheme there will be options like Dividend & Growth. Growth is for accumulation and dividend can be chose if you would like to recieve dividend income.
      MIP – Dividend Payout or Monthly Dividend option is to get periodic income. In case if you would not like to receive the dividend you can opt for Growth plan.
      Read: Best Debt Funds.

      Reply

  • I (age-32)have the following investments till now –
    a) PPF – Started 2015 (end -2030 then) — Avg invest – 70 K /yr (Planning to gradually increase by 10-20% yrly)
    b) LIC (jeevan saral – bought 2010/ maturity -2030~ Sum assured 15L / prem – 72k/yr) — bit costly but cant close/change it now ,as it may bring loses too much b4 10 yr ). [ really need some help here ]
    c) MF recently started – Investing in SIP 11k in below funds(except principal all are in 1k) -Horizon -10-15 yrs

    Birla SL Frontline Equity Fund(G)
    Kotak Select Focus Fund(G)
    ICICI Pru Top 100 Fund(G)
    Principal Emerging Bluechip Fund(G)
    ICICI Pru Focused BlueChip Equity Fund(G)
    HDFC Balanced Fund(G)
    Franklin India Smaller Cos Fund(G)
    UTI Mid Cap Fund(G)
    Mirae Asset Emerging BlueChip-Reg(G)
    DSPBR Micro-Cap Fund-Reg(G)

    May increase SIP by max 20% yearly as applicable. [ Qn – Is it good portfolio or need to change/add any EQ/balanced/debt fund ?]
    d) FD – which will mature 2019 – 7 L approx after tax [ Qn – Want to reinvest 70% for short term 3-5 yr max,pls suggest good ways to invest them ?]

    NOTE – health Insurance provided by employer good enough for my family.

    Could you please help me if they are correct investment .

    Reply

  • Hi sir
    Plz tell me ELSS as tax saving instrument. And if I start SIP on 10th nov 2016 then wat will be end of lock in period. I guess it is 10th Nov 2019.
    And can this ELSS be used for more than one financial year for rebate in 80C as SIP will continue in next financial year also.

    Reply

  • Hi Sreekanth

    I want to opt for Atal Pension Yojana for my sister (who is 39 years) . She is married and living with her husband
    I want to invest the money Rs 1554 (Monthly pension of 5000) on her behalf , but don’t want her husband to get any benefit out this (in case of death)

    I am not looking for pension amount as that can be only for spouse but looking for corpus amount under Atal Pension Yojna Scheme , Could I get any case of death of my sister
    Please note my intention is to secure pension amount for my sister with its benefit should be enjoy by her husband

    Please suggest

    Reply

    • Please note my intention is to secure pension amount for my sister with its benefit should not be enjoy by her husband

      Reply

      • Dear Gurvinder ..As per the scheme rules, the subscriber will receive pension after 60 years of age (life-long).
        But on demise of the subscriber, the spouse would receive the pension amount and the corpus amount is given to the nominee.

        Reply

  • Hi Mr. Sreekanth

    thanks for your articles and replies

    my question is

    what is the difference – if i invest lump sump of Rs. 25,000 every month in different top Mutual funds by 5k each as per the current market and as a other option if i invest Rs. 25,000 in SIP in 5 selected MF. which one is beneficial investment?.

    Reply

  • Hello Mr. Sreekanth,

    Good Evening to you. One valued advice I am seeking from you regarding my endowment insurance policy HDFC SL Classic Assure Plan- 15 Years policy term. I have started the same in 2012 and till the time I have already paid 5 nos. annual premium of amount Rs.16000/- each. Next 2 premiums for 2017 & 2018 are yet to pay.
    Considering the pathetic return scenario of endowment insurance plan I am worried a bit about future performance of this policy. Pls give me your valued opinion whether I should surrender the same now or continue till the premium payouts term.

    Thanks in Advance.

    With Warm regards,
    Suman

    Reply

  • Hi Sreekanth,
    I am 26 year old working as senior operations Executive in a manufacturing company. I live in a joint family, so most of expenses are covered by my father. He is central government employee and will be retiring in next 506 years. I have some queries for which please refer to below details.
    Current money exposure
    1. 2 Bedroom flat taken in Virar Mumbai for Rs. 39 Lakhs. Loan amount sanctioned for 37 Lakhs including property insurance from ICICI Lombard and life cover from Aviva (in my and wife both names). Purchased in April 2016. Loan tenure 11 years.
    2. One LIC policy taken recently for insurance cover as well as investment purpose. Taken for 35 years.
    3. Max Life integrated family floater 15 lakhs with individual 1 lakh each for me, wife and one baby, taken for 35-40 years.
    4. I have approx 1.50 Lakhs Rupees in savings account for combined expenses.
    Current money expenses
    1. 44500 Rs/Mont EMI amount from next year 2nd half onward, currently 25500 Rs Pre EMI going on.
    2. 26000 Rs/year towards LIC Policy
    3. 16000 Rs/year towards health coverage.
    4. 7000/month monthly expenses.
    Incoming funds
    1. My 32000 per month in and salary with approx 60-70000 per year bonus/incentives.
    2. Wife current take home salary at 13000 Rs/month.
    My future targets:-
    Emergency Fund – 2 lakhs
    Insurance if required any
    Wealth building
    Retirement fund – Yet to plan to invest in which
    Kid’s education
    Car in 5 Years – 5 lakhs (rest will be used from Car loan; Total Value of car 7 Lakhs)
    Mid term goals like family vacations, home/furniture upgrade etc – 2 Lakhs in every 3-4 years.

    My query:-
    1. Am I sufficiently covered present insurance schemes or do I need to take one pure term life cover from hdfc?
    2. I need fund considering the timeline of new born baby boy.
    3. What kind of investment approach should I take now onward as I wish to plan in advance to avoid last minutes?

    Thank you.

    Reply

      • Dear Suraj,
        1 – May I know the Sum Assured of your Aviva plan? also Plan name.
        2 – Kindly share details of your LIC plan (plan name, commencement date & policy tenure).
        3 – May I know if your spouse has any life insurance cover? What about Personal Accident cover for self & in your spouse name??
        4 – Kindly go through below articles and you may revert with more queries;
        Kid’s Education goal planning.
        Retirement planning made easy.
        How to create a solid investment plan?
        List of articles on key aspects of Personal Financial Planning.

        Reply

        • Hi Sreekanth,
          After a year EMI will start which will be 44500 . I have approx 144500 Rs in savings account. My primary concern is tax saving as well as insurance cover with investment another target.

          1. Can I claim tax benefit on my present Pre_Emi payment?

          I have decided to take One Term Insurance Policy, one Accidental Insurance Policy.

          2. Can you please Suggest me one pure life insurance term policy and one accidental and disability cover with good support?
          I have already taken MaxBuppa Family first silver plan with 18,00,000 Rs coverage. EMI stands at 15,872 Rs. Please note I have taken home loan of 36 lakhs. For this I have taken 35,00,000 lakhs home loan insurance from ICICI Lombard using one time payment mode. It will be valid for ten years till 15 May 2026. Further I have taken life cover against home loan of approx Rs 35 Laks from Bharati Axa Life Loan Secure and Bharati life group accidental death rider of Rs approx 35 Lakhs. Policy started this August only with one time payment amount of 102000 Rs approx. Further I have taken LIC new Jeevan anand with profits. Policy started in this August only with total 35 years with basic sum assured of 8,00,000 and return of 40,00,000 minimum against EMI of 24,000_maximum.
          3. Any specific suggestion for long term investment?

          Please note as I am young and more eagerness to take risk for growth. Further most of my life long impact decisions I have taken in last six months only. Please review same and advice if somewhere course correction is required. Please refer to first post as well before suggesting anything.

          Regards,
          Suraj Rai

          Reply

  • Hi Sreekenth,
    Thank you for your valuable articles. your articles are more informative and helpful.
    I want to invest a lump-sum amount of 60K once. what are best returns options for 5-7 years period.
    shall i choose sip, mutual fund, shares or any other options.
    waiting for your valuable reply.

    Thanks,
    Mahesh

    Reply

  • Dear sir

    I found your blogs very useful, thank you for very much.

    i want your expert opinion on my problem

    1. I had taken a LIC jeevan anand policy 815 last year in april 2015 with premium approx 30000. now i find it is useless.
    Please suggest me how to get rid off. i read one paid off option. will the tax saved from this be deducted in next year if i choose paid option? how much i will get after maturity? suggest me best option, please.

    2. one more thing i want to ask

    which is better investment option to buy home on loan or to invest in mutual fund/shares/elss in long term?
    Thank you in advance

    Reply

  • Dear Sreekanth,

    I have about 20 lacs to invest for my retirement…15 years from now and I am looking at o getting 2 crores.

    Please suggest suitable mutual funds by name to help me get there.

    Regards

    Kumar

    Reply

  • I have been advised by HDFC Bank to invest in HDFC SL ProGrowth Flexi for a 10 year plan, with a premium of 1 Lac per year. I currently have investments in 4 mutual funds, Birla Sun Life New Millennium Fund-Growth,RELIANCE PHARMA FUND – GROWTH PLAN – GROWTH, SBI Small & Midcap Fund – Regular Plan – Growth-,UTI-PHARMA & HEALTHCARE FUND -GROWTH. I also have an investment in FD @ 7.5% interest which matures end of the year. I have an SIP with Reliance Growth Fund – Growth Plan, Growth Option of 180 months which I have completed 95 months.(Rs 5000 per month)
    I have Equity Shares in Larsen and Turbo Limited, Tech Mahindra Limited, Tata Steel, Reliance Industries Limited and Power Grid Corporation of India.
    Most of my investments are very random and based on advice. I am not a finance and market person.
    Any advice would be appreciated.

    Reply

  • Hi Sreekanth,

    I am currently investing in equity market directly. My broker approached me and told about SIP in DSP Black Rock mutual fund.
    I checked couple of websites like moneycontrol, zipsip etc. and found the below SIPs having good return.
    Large Caps:
    1. Kotak Select Focus Fund – Regular (G)
    2. SBI Blue Chip Fund (G)
    3. Birla SL Frontline Equity (G)
    4. Birla Sun Life Top 100 (G)
    5. Reliance Top 200 Fund-RP (G)

    Small Caps:
    1. DSP BlackRock World Gold Fund- Regualar Plan- Growth
    2. DSP BlackRock World Gold Fund- Regualar Plan- Dividend
    3. Kotak World Gold Fund- Standard Plan (D)
    4. Kotak World Gold Fund- Standard Plan (G)
    5. DSP BlackRock Natural Resouces and New Energy Fund- Regular Plan- Dividend
    6. DSP BlackRock Natural Resouces and New Energy Fund- Regular Plan- Dividend

    Please suggest for both long term (20-25 years or may be more) and short term (3-5 years).
    I need lump sum of money in regular intervals in buying assets like plots, flat etc. I think I can go for 2 long term SIP and 3-4 short term SIP.
    Me and my fiance will be investing around 15000 per month from beginning and will invest more in next couple of months.

    Please post a link if you have any detailed thread for tax saving SIPs and its returns.

    Reply

  • Hi Sreekanth,
    I am 23 years old & have recently started my First Job with take home salary of Rs 50,415. My parents had already started 2 LIC policies in my name (Both S.A- 2,50,000) for which quarterly premium of 3000 is being paid by them currently. I recently bought Aegon Life term insurance plan (S.A- Rs 75 Lac) with annual premium of Rs 6038.

    Investments:
    1. Icici Prudential Value Discover- 1000/month SIP
    2. SBI Bluechip- 1000/month SIP.
    3. PPF- 2100/month

    I want to invest 6-7k more for long term (20-25 years). Kindly suggest where should in invest- ULIPs, Mutual Funds, ELSS??

    Do i need any more insurance( as in health?)

    Please advise on the Aegon Term plan also- Is it a good bet?

    Reply

  • Dear Sri ,

    I just sold a flat and got around 10 Lakhs in my account , would request you to please let me know where do i need to invest the same amount so that i could get at least a crore in 20 years time frame. I can manage rest of the things ( responsibilities ) from my salary so i want to invest this amount 10 lakhs for my retirement .

    I would request you to please guide me .

    Reply

  • Hi Sreekanth,

    Thanks for the article. Well articulated and very simple to understand for layman like us.
    I have few questions for you. I am planning to buy a plot in Bangalore , near varthur in a gated community very soon. I have shortlisted the project. I am looking at building a house for myself in 3 to 4 years of time ideally. I need to understand how the land appreciates in Bangalore and whether it will be a wise investment to go ahead with. In case my plans to build a house is not successful then I should be able to sell the land at an appreciation considering inflation etc.

    What do you recommend

    Thanks for your help.

    Reply

  • Hi Sreekanth,

    I am in search of Investment options and finally I found your Blog, which share very good information.
    Thanks for educating and making us financially strong.

    I am NRI and would like to invest in India. i have a year and half years old daughter. I am 33 years old.
    I have few question listed below:

    1. What insurance should I take for my family (spouse & Daughter) as of now no insurance.
    Company provide insurance for me.

    For NRE FD and RD I know there is no tax applicable.
    2. Does tax applicable if i invest in India ELSS & other MF mid, long terms?

    Thanks in advance.

    Sri.

    Reply

  • Hello Sreekanth,

    I am in a very bad situation with ICICI PruLife Guranteed Savings Insurance Plan. I was misguided by an agent and off course I am also equally responsible to avail the product.

    The product says to invest:
    Issue year: 2011
    Term: 20 yrs
    Maturity year: 2031
    Premium amount: 50,000
    Frequency of payment: yearly
    Sum assured: 5,00,000

    So, I have to pay for 10 years for 50k and rest 10 years the money will be locked. Post 20 years, I will get 5Lakhs as sum assured with some additional benefits which is not clearly mentioned anywhere.

    I have paid 5 years for amount 2.5Lakhs and now when I am referring the blogs and the financial advisor, all are advising me to QUIT immediately. I have asked the ICICI PruLife and they informed that if I surrender now, I will get approx. 70,000 only.

    I do not want invest on the product which has insurance and investment plans as these do not have good return. If insurance needs to be taken, take a term plan which covers 1CR and if any investment needs to be done, need to invest in PPF, Sukanya Samridhi, FD, NSC etc.

    Please suggest me as I think I should surrentder the ICICI PruLife and invest the money in FD or PPF.

    Reply

  • Dear Sreekanth
    I am new with investment and I have to save for my sister’s marriage which is a short term goal(like 3 years). I can spare 7k per month. I am currently putting 7k per month to PPF. But can you suggest how do I achieve my short term goal within this money so I am saving also for my goal and reducing tax burdens also with it? Thanks

    Reply

    • Dear Karn..If I understand you correctly, you would like to invest in a product with a time-frame of around 3 years and that should also give you tax savings? Am i right? May I know your target goal amount?

      Reply

        • Dear Karn..As the goal is a high priority one, you need to decide if you can afford to take risk or not. You may invest a certain amount in ELSS fund (lockin period is 3 years) for tax saving purpose and remaining portion in a balanced fund or in an aggressive MIP fund (these will not give you any tax exemption).
          As the units of ELSS funds are locked in for 3 years, you may have to make a lump sum investment now itself.
          Kindly read:
          Best ELSS funds.
          Best Balanced funds.
          Best MIP funds.

          Reply

  • I am 30 Years of age unmarried living in Pune and earning 65000 per month take home salary (including EPF deduction). I plan to invest 15000 in monthly SIP as of now which will be increased every year.
    My investment horizon is 22-25 Years. My expenses per month are around 35K including rent.

    My goals and amount needed for them are as below. All amounts are inflation adjusted.
    1. Child education and marriage at around 15 Years – 50 Lakhs.
    2. Retirement at around 55 Years – 2 Crores plus.
    3. Home in about 10 Years from now – 25 Lakhs.
    4. Car in 5 Years – 5 lakhs (rest will be used from Car loan; Total Value of car 7 Lakhs).
    5. Mid term goals like family vacations, home/furniture upgrade etc – 2 Lakhs in every 3-4 years.

    **Apart from this, I have my sisters marriage in about 18 months from now for which I need to accumulate 1.5 Lakhs minimum. I can invest 8000 Monthly over and above my portfolio specially for this.

    Shortlisted Funds:
    1. Franklin India Prima Plus (MultiCap) 2000 Per Month (Long term goal)
    2. Birla Sunlife Front line Equity 2000 Per month (long term goal)
    3. HDFC Mid Cap Oppurtunities(MidCap) 1000 Per MOnth (Long term goal)
    4. Mirae Asset Emerging BlueChip (MidCap) 1000 Per month (Long term goal)
    5. Tata Balanced Fund
    6. EPF of 2200 per month will be used for retirement and cover a part of my debt portfolio for retirement.

    Axis Long Term Equity (ELSS) 3500 Per month.
    Reliance tax saver 3500

    My questions are as below.

    1. Is the current choice of funds in line with my goals.
    2. I plan to use balanced funds for any of my medium term goals which is of 4-5 years and ELSS for Child education and marriage. Is this correct ?
    3. Should I go for traditional Large Cap Mid cap portfolio (60:40 Ratio) or Multicaps are good
    4. Should I go for direct plans right away or should I place a switch to direct after 1 year when I complete in regular plan. I can track direct plan portfolio using external tools available like on VRO. I think I can do that.
    5. Could you please guide me for any debt/income/short term plan for my sisters marriage – I can invest 8000 Monthly over and above my portfolio specially for this. Need some tax effecient and low risk option. This amount is critical.
    6. How good are these funds for 20+ years, Basically I want to know whether such funds would continue for these long years keeping in mind we have some merged funds, closed funds over long term.
    7. I ignored Value discovery fund since it has grown to enormous Aum and I fear it will meet the same fate as HDFC top 200. Is this correct that funds growing in Aum considerably find difficult to show same stellar performance as they shown previously

    Reply

    • Dear Abhishek,
      Appreciate your analysis and clear-cut thinking. You have clearly identified your goals and you also know how to go about in achieving them.
      As of now you are single, so you can prioritize your sister’s marriage & retirement goals as your high priorities.
      Consider buying yourself a stand-alone Personal Accident cover (if you do not have one). Do you have health insurance cover?
      Read: Best Personal Accident Insurance Plans.
      1 – The portfolio looks fine. You may allocate more funds to mid-cap schemes for long-term goals (>10 year ones)
      2 – Go ahead with balanced fund. Also, if tax saving is one your investment objectives (for long-term goals), do consider ELSS funds.
      3 – Long-term : Multi-caps & mid/small cap funds can be beneficial.
      4 – Consider Direct plans.
      Read:
      MF Utility online platform.
      Direct MF Plans Vs Regular Plans – Comparison of returns.
      5 – You may consider one MIP + one Arbitrage Fund.
      Read:
      Best MF MIP Schemes.
      Best Arbitrage Funds.
      Best Debt funds.
      6 – Anything can happen over the long-run. We need to keep monitoring the funds. Consistency is important and not staying with the best (it is almost impossible).
      7 – Personally, I do not worry much about AUM.

      Reply

  • dear Shreekanth,

    I am 46 yrs old. my husband suddenly passed away due to cardiac arrest. now i am going to get around rs 40 lac of his pf n gratuity etc. i m working n getting a salary of 50k per month. my only so is in std 12. i m very confused where should i invest that amount so i can get minimum tax load n hv enough amount to send my son for higher studies. will you please guide me as i dont have any knowledge of investment. i just opted a icici pru life insurance pla of rs 3 lac for 5 yrs. so i now wanted to invest only where i can get decent returns.

    thanks
    Amita

    Reply

    • Dear Amita,
      Kindly share more details about the ICICI plan (plan name, tenure, commencement date).
      1 – Your high priority action item is to get yourself adequately covered with a Term insurance plan. Suggest you to take a basic life cover with atleast Rs 50 to 75 Lakh. You can claim this premium as tax deduction under section 80c. Kindly read: Best Term insurance plans.
      2 – Also buy a stand-alone Personal Accident Insurance plan. Read: Why one should have a PA cover?
      3 – Maintain an Emergency fund of say 6 to 9 times of your monthly living expenses as cash + FDs.
      4 – Buy a Family floater health insurance plan. You can claim the premium paid as tax deduction u/s 80D. Read: Best Family floater health insurance plan.
      5 – Your son’s higher education goal target year is around 3 to 5 years from now. So, you may consider investing in a MIP Plan (like Birla II Wealth 25 plan) & a small portion of savings in HDFC Balanced fund.
      Read:
      Kid’s education goal planning calculator.
      Best MF MIPs.
      Best Balanced funds.
      6 – May I know your expected retirement age? Do you have any other sources of income? Have you made any other investments?

      Reply

  • Hi Sreekanth,

    I have contacted financial advisor from Kotak Mahindra Bank to plan for decreasing the tax and it should give better profits. He advised to invest in Kotak Assurance Savings Plan which will give 10% returns and Axis Long Term Equity Fund which gives returns of 14 – 17% on an average. I am planning to invest 5k per month. His advise is to invest Rs 2500 in each. I am planning to invest for the period of 10 years. Please advise me whether I can follow this.

    Reply

  • dear sreekanth i am confused where to invest.i am now 41 yrs old,my spouse 40.we have a 6 yrs girl child.we r both doctors.at present moment i am depositing 1.5l to ppf,1l to sss.my wife has her own ppf ac and depositing 1.5 every yr.
    we have 4 l mediclaim from ster health with top up of 16 l from l&t.
    planning for a term plan (will buy this month) and PAC from applo munich(both of us).now our goal is that 1.after 10 yrs we need lump sum for child s higher education.
    2. after 20 yrs- child marriage
    3. after 24-29 yrs-retirement.
    at present we can invest another 1 lk each per yr
    also we need some money for emergency and vacation
    pl suggest what will best way to invest and where to invest.balanced fund or equity oriented MF

    Reply

  • Dear Sreekanth,

    I am 28 years old, working in TCS with 6 years exp. I am earning around 60K every month. I am married (my spouse is house wife) an year ago and blessed with a daughter this march.

    I have LIC Jeevan Anand plan from 2011

    Premium amount – 50,000/- yearly – (For me & my wife)
    Policy term – 78 (Premium payment term – 21)
    Sum Assured – 10,00,000/-

    I need to plan saving total of Rs. 20 lakhs at the end of 15 years. In addition Rs.40 laks at the end of 20 years.

    How should i plan my savings?

    After reading your posts, i think LIC plan i ma having is not usefull. I have availed these plans for tax benefits.

    Kindly help how should i plan my future financially?

    Thanks for the help
    Deepak

    Reply

  • Sir,

    I is getting 20 lakhs rupees as my inheritence from selling of family ancestor land.
    Of this 5 lakh is cheque and 15 lakh is cash.
    I am invasting 5 lakh cheque in long term fund as per blog.
    How to invest cash? Gold etc. no return

    I am 29 years old , earns 7 lpa . wife earns 5 lpa. no childrens.

    Reply

    • Dear Karan,
      It is very tough to manage black money (to convert it into white).
      You may gift some money to your parents (assuming they are not tax assessees or in low tax bracket) and invest in their names so that you can avoid paying taxes.

      Reply

  • Hi sir….I am new to mutual fund scheme.
    Now i am investing in
    1)Sbi bluechip 500 rs mly sip
    2)sbi midcap 500 rs mly sip
    3)hdfc midcap 500 rs mly sip
    4)Axis long term equity 1000 mly sip
    5)franklin taxshield 500 rs mly sip
    6)Dspblack midcap 1000 rs mly sip
    7)Reliance tax saver 500 rs mly sip
    8)Birla tax plan 500 rs mly sip

    6 out of 8 fund were choosen direct at their website without broker code….all are selected growth option…

    Is it ok…?

    Reply

  • Hi Sreekanth,
    I am investing 1.5 lakh every year in PPF. Now government has reduced the interest rate to 8.1%. But i will continue it atleast for 10 Years. After investing 1.5 lakh in ppf i am having around 1 lakh to invest. But here i am ready to take little bit of risk. I am new to market so i dont know more i want to invest this lumpsump amount in some muual fund.
    Can you suggest me some short term mutual fund.

    Thanks
    Aashish Pachouri

    Reply

  • I will retire in this June 2016. My savings are Bank FD 50L, EPF 25L, PPF 15L, Other retirement funds like leave encashment etc. 3L. MF – icici prudential blue chip, HDFC midcap – 2L
    Family floater Health insurance 5L (premium 27000 pa)
    Goals – Daughter marriage in next 2-3 years.
    Looking for fixed monthly income of around 35K-40K post retirement beating inflation.
    How do I plan my investments with above savings.

    Reply

    • Dear Sathish,
      Retirement planning : Kindly use the calculator available in this article to know your require corpus or savings..Click here..
      Daughter’s Marriage expenses : Use the calculator available in this article , click here.
      As the marriage is being planned in next 3 years, suggest you to invest/remain invested in safe bets (like FDs/RDs) to meet the marriage expenses.
      For retirement expenses, kindly use the calculator and you may revert to me with your queries..

      Reply

  • Dear Sreekanth,

    I thoroughly enjoy reading your articles and your helpful suggestions.
    I have only ONE Issue:
    I am 65 years and self-employed in 30% Tax Bracket – Rs.12L yearly income(aprox).
    I was suggested to keep investing in –
    1. ELSS – 1.5L to Save Tax. – Rs. 1.5L/year.
    2.SIP in EMF – To build Corpus. – Rs. 5.0L/year.(Current Corpus- Rs.45L aprox)
    3. SW after 1-3 years,if need funds.

    Have NO Investment in Debt/Balance Funds, Bank FDs,PO Deposit/Pension Schemes etc.

    Kindly, suggest a professional way forward …

    Warm Regards,

    Reply

  • Dear Sreekanth,

    I am started to visiting your website from the last week. Thanks for sharing your ideas and suggestions regarding life insurance. I’m 30 year old, I want to buy a health insurance plan which covers the medical expenses for my family. So far I don’t have any insurance plan for me and wife except my son (1 year old). Kindly suggest best plan.

    Reply

  • Dear Sreekanth,

    Thank you for sharing such a valuable insight into investment options.
    I would like to request your advise in planning for a long term investment.
    I am looking forward to invest for my Kids future. Aim is to get a maturity return of Appx 25 Lacs in 20 years period.
    For this, I did a check of 2 LIC policies “LIC Jeevan Labh 386” and “New Children’s Money Back Plan” .
    But heard not so good reviews about these 2 plans. Could you please advise good investment plans to reach this goal.

    Thanks & BR,
    Kaushik

    Reply

  • Dear Sreekanth ,

    i have a annual income of 12 lakhs , am planning to buy a house , but want to start investing . have read a lot of your blogs , can you suggest me , what would be a good option for me would be . to start a SIP or to take 5 stocks and keep investing for 5 years continously on my own . am planning to invest 10000 every month .

    Reply

      • Hi Sreekanth,

        Short term investment – 10 Lakhs in FD (1 year) (7.75%)
        Medium term investment – 10K/month for 10 years (9%) still 8 years to go

        Planning to start SSD scheme, 1.5 Lakhs / annum

        I would consider 15 to 20 years as long term tenure.

        Reply

  • Hi sreekanth, pls help me with my query on capital gains n tax filing
    1) 2bhk _ 2002 bought for 6 lacs n sold out in 2015 jun for 22 lacs.
    2) stayed in d flat for more than 10yrs
    2) received allmoney thru chq n deposited in savings account
    My queation how much will b my capital gains.. what is that i have to show while filing d tax for 2015.2016 year.

    Reply

  • Hi sreekanth,it happened to browse ur website nd blogs.good informative article on various investment options
    Regards
    Prasad sva

    Reply

      • Very quick reply which not anticipated:-)
        I won’t say I am good and bore u.i am closely following blogs like u and accordingly invested and planned my finance stuff.
        Need u r help,pointer on investments which are tax free like ppf.
        Want to reduce tax burden as much as possible if there is any way
        All sections are utilized for exemptions

        Reply

  • Thanks Sreekanth for giving best investment schemes list. I am blogger like you and have to save PF. And i also want to save tax and to gain wealth at same time. Which Mutual fund you will suggest since i have already invested in PPF/LIC.

    Reply

  • Dear Mr. Sreekanth,

    All your blogs are fine and useful and thanks for the same.

    I had already sent you a request. Since I am not finding it here I am sending you once again. I am 58 and retired. I will be getting around 30 lacs. Since the interest in Bank FDs for general category is around 7.5% only, I want to invest in mutual funds where my investment will be safe and I can get around 10 to 12 % return. Kindly give me your suggestions.

    Regards

    H. R. Krishnan

    Reply

  • Hi Sreekanth
    Please find my query below

    Goal – Daughter’s annual school fees , Target -yearly … I have invested in RD.
    Which will give better return post tax deductions in RD & short term debt funds?
    Debt funds: need to pay 1-3% exit load & 30% Tax , if invested through SIP for 1 year.
    RD : as per income tax bracket.

    Goal – Creating Contingency fund. Please let me know the ideal tool.

    Have you posted any article on Debt funds? Need to understand the system!!!.

    thanks in advance

    maheshprasad

    Reply

  • I feel if one want to create wealth, they should for long term investment options indicated in your article Sreekant. Short term financial products would be useful for savings, but not for growing money

    Reply

  • I dr.bhupendra patil is investining in mutual funds through sips, since kast7yrs.my time horizon is 20yrs.so l have lots of courage to stay Iinvested for long term,

    Reply
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