What are best investment options for salaried person in India?



  • As a salaried person, you tend to get confused while taking the right investing decision. A fixed salary, EPF, tax deducted(TDS) and monthly salary cheques/credits to your account, familiar terms for a salaried individual.
    Now, the question is how to save and invest this salary income to generate future benefits?
    A salaried person usually ponders over the best investment options available. Here are few long term investment options in India that came to my mind, which I would like to mention:

    • PPF or Public Provident Fund: Who doesn't know this investment alternative? We all do, right. PPF fetches 8% p.a. interest for quarter Oct to Dec'18 and provides fixed income without any risk.
    • NPS or National Pension Scheme: Another popular long term investment. Although, this doesn't give a fixed return, but still a common choice.
    • Gold Investment: An all time favourite, we all love investing in gold, as and when we afford to do so.
    • Mutual Fund Investments: SIP or Systematic Investment Plan seems quite convenient since you can start investing a small amount regularly.
    • ELSS or Equity Linked Saving Scheme: ELSS has a lock-in period of 3 years and tends to give you better returns. Although, there's no guarantee of higher returns, still a popular way to invest money in India.
    • FD or Fixed Deposits (Recurring Deposits): A traditional way to invest money in India. FD is the simplest and the most common way to invest your earnings.

    This is not "one fit all" solution. Individual needs and goals may vary. Similarly, there investment choices may vary as per their risk appetite.
    Direct Stock market investing involves too many risks, so I won't call it the best option for a salaried person initially. Once a person grows in career and has excess savings he can explore new investment opportunities.

    I have expressed my opinion, what do you think? Do you have any other best investment options to add to this list? Which is your favourite investment option in India? Any suggestions for a salaried person to get higher returns plus tax saving.



  • @ishu I feel PPF is best. Now, that PPF interest has been again increased to 8% p.a. We have surety of earnings and they are tax free as well. PPF seems to be a good investment. But, we can invest Rs.1.5 lakhs only during a year in this. So, I wish this limit gets increased so that we can put more money in safer investments like PPF.



  • @ishu What about ULIP and Post Office Saving Schemes? Are they worth investing? I have been into job since past few years. I have a PPF account and few FDs. I am looking for risk free options. Any suggestions on this.



  • Hi, I think you can try investing in mutual funds. But, that's not risk free. You can start SIP wherein you can fix a monthly investment amount. FDs don't give good returns these days.



  • Hi, You can't call PPF as best. I know it's a safe option. But, check the past few quarters interest rates. The PPF interest rate has reduced so much. It used to be above 8.5% few years back. This came down to 7.6% also in the previous months. So, I don't think we can call it the best investment option for all. For people finding sage alternatives, this may prove good. But, for the ones looking for higher returns, you need to try different investing options like mutual funds & stocks. What do you think? Any feedback.



  • @ishu Yes, PPF is one of the favourite investing alternatives in India. I have seen most of the salaried persons opting for PPF as a long term investment option. In fact, it's good for one's who don't want to take any risk and look for fixed returns only.
    Mutual funds & ELSS have some risk attached to them. So, we must firstly analyse our risk horizon before diving into any particular investment option.



  • @ishu I have heard a lot about mutual funds. Some of my colleagues invest in mutual funds. I am confused, is it worth investing? Is there a lot of risk while investing in mutual funds? Will I get back what I invest? Should I try it or stay safe with fixed return investments.



  • Hi,
    ULIP's are Unit Linked Insurance Plans which are publicized as combo offer of insurance and investments.
    Ideally, the two goals i.e. insurance and investments should be separated from each other. Insurance is risk coverage of mis-happening and investment is wealth creation. The two should be treated differently.
    If you are looking for insurance, Its better to get a term insurance and invest rest of the amount in Mutual Funds or any other saving instrument which you are comfortable with.
    Also Post Office Savings Schemes are good, they offer higher rate or return, but problem is accessing their services, which are not completely online.



  • Hi,
    The returns of Mutual Funds largely depends on time you stay invested in them. If you are planning for 5-10years of investments in Mutual Funds, then probability of good returns is high although not guaranteed.
    In Mutual Funds, the more time you stay invested, the probability of good returns increases.
    As such I dont recommend anybody to invest in Mutual Funds for less than 5 years.



  • @prateek I too have heard that mutual funds give good returns, if we invest for longer duration. Sometimes there are too much fluctuations in market. But, one needs to be patient enough to get desired returns.
    On the other hand, Stocks seem too risky. For salaried person, I feel firstly go for safe investments like PPF and FD. Then if you have excess you may try mutual funds according to risk taking capability. Avoid making too many risks initially.



  • @prateek said in What are best investment options for salaried person in India?:

    Hi,
    ULIP's are Unit Linked Insurance Plans which are publicized as combo offer of insurance and investments.
    Ideally, the two goals i.e. insurance and investments should be separated from each other. Insurance is risk coverage of mis-happening and investment is wealth creation. The two should be treated differently.
    If you are looking for insurance, Its better to get a term insurance and invest rest of the amount in Mutual Funds or any other saving instrument which you are comfortable with.
    Also Post Office Savings Schemes are good, they offer higher rate or return, but problem is accessing their services, which are not completely online.

    Yes, I agree. These are great ways of investing while you're earning. I would like to add that the stock market is also another great way to invest. All you need to do is open a demat account and a trading account with a registered broker and you are good to go.


  • administrators

    @mohit-chauhan mutual fund investments are a way of investing into the stock markets only πŸ˜‚



  • @mohit-chauhan

    Seems you are trying to make big money in quick time. Hope this happens for you.
    As for most of us i.e. people I know, trading in stocks is more like playing with fire.
    Its better to stay away from it if you are investing for short term.



  • @mohit-chauhan @prateek Yes, Stock market seems to be a lucrative option. But, that's actually very risky.
    So, I also won't probably add direct stock investing as the best option for salaried individuals. Being a salaried person, one can try out other available investment options. Why take too much risk initially?
    If you have started a new job then go for safer options. Once you have a fairly good earning & can afford bigger risks then only try riskier options. If you still feel like exploring stock market, investing in mutual funds still seems to be a less riskier way. Mutual funds also have risks attached. But, if you plan and invest smaller amounts like SIP or Systematic Investment Plan, then you may place yourself in a much better position.



  • @ishu Hey, What about investing in a house? This can also be considered as one of the best investment option. All persons whether salaried or others wish to have a house of their own. So, if we can start saving and put some amount in home investment, that can be a good idea. You can also get home loans to support it further. What do you think about it? Am I correct in saying so? Any views on it.



  • Hey, investing in house requires a big lump sum amount. A salaried person having a small basic salary can't afford it. We have to rely on home loans for that. Then we have to pay EMIs including interest.

    So, I don't feel this is the best investment. On personal level, having a house feels good. But, we should go for it once we have extra savings. Don't you think so? Before that, we must keep some money as emergency fund and in other investments.



Disclaimer: Any views/recommendations expressed in the forum, of the individuals are their own only. Fintrakk doesn't endorse or recommend any financial product or views by the users of the forum. The information/comments on the forum should not be considered as a financial advise. Please do your own due diligence before investing. Fintrakk is not responsible for any financial loss to any of its visitor/user.