(Last Updated: May 14, 2019)

What are best investment options for salaried person in India?



  • 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.



  • @mohit-chauhan mutual fund investments are a way of investing into the stock markets only 😂



  • @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.



  • Most of the salaried persons in India are confused about 'Where to invest?'. The option provided in the article by the writer are good and very safe but investment can also depend upon the interest of the person. Long term investment can certainly help the person in future and the amount of risk involved is also low.



  • @landpel Hey, its not confused rather you can say most people are actually unaware of the different investing options. This unawareness leads to confusions. So, there needs to be more awareness on financial planning.



  • @prateek Hi, I too agree to your point that in mutual funds: the more time you stay invested, the probability of good returns increases. In fact, I believe that one has to stay calm, not to panic on market lows and wait to cash in better results. Its normal human tendency that once market is low, we start withdrawing our investments.
    But, I think a bit differently, one should wait a bit, analyse the market trends and try to lower losses.
    For a salaried person, I think starting a SIP in mutual funds with a small amount can be a great idea. That doesn't burden his pocket plus he doesn't need to dive directly in stock market. So, dual purpose is solved. What do you think?



  • National pension fund I assume is on by default anyway, correct ? Are gold or silver deposits covered by some guarantee or what ? And yes all that stocks and mutual funds... you can even trade on forex, crypto and binary options LOL. I am all for fixed deposits.



  • @Punkeirang you seem to be confused about the market investment. Though I understand your safety but if you take a deeper study, fixed deposits cannot beat inflation. It means you cannot create wealth through deposits.
    For example, if you invest Rs. 100 today in FD, you will get Rs. 107 next year (maximum; assumed 7% interest). But with assumed 5-6% inflation, the value of Rs. 100 today is equal to the value of Rs. 105-106 next year, not to mention tax eats up little more too, Rs. 1-2 approx. So end up with Rs. 107-108. Technically, it means that you either gain 1% as a real return or nothing at all.

    If you want to create wealth, you need to beat inflation. FD is only good for emergency fund.

    Forex, crypto and binary options are far from legal regulations, so we should not think about them at all.

    Equity Mutual Fund is the only one type of investment that can create real wealth in the long term (not good for short term except liquid funds).

    Stock Market is not for everyone, but for those who are willing to take it as a trading career.

    FYI: Gold Silver depends on the market risk and not a guarantee one. It's a commodity investment/trading.

    I agree with all of @Ishu posts regarding SIP MF, there are lots of benefits that none other can offer. Compounding, Averaging, tax benefit, smallest seed to biggest tree, balancing all RD/FD+Stock Market+Bonds+PPF = Mutual Funds (for understanding purpose)



  • @Tarun Well said! But, I know it is a general tendency or habit of putting money in fixed deposits. So, people believe they get good fixed returns on FDs. While actually it doesn't fetch much. The interest rate that bank shows is pre-tax. By the time, you get money, add up inflation cost and deduct taxes. The amount one actually receives in hand is quite less.
    And, that "FIXED INTEREST" tag seems too attractive to ignore.
    Although, I believe for senior citizens FDs is a decent option. But, for young salaried persons, one can look beyond FDs as well.



  • @Tarun One thing, I want to point out is PPF shouldn't be equated with mutual funds.
    As far as I know, PPF is a tax free investing option. It gives nominal interest of 8% p.a. Sometimes a bit higher or lower. The interest earned on PPF is also tax exempt. There's no tax on maturity also. Further, there's no risk of losing your capital or bearing losses as in mutual funds or stocks. So, overall I think PPF is a good tax free long term investment option.
    And, I would say not only for salaried person, but it is a great option for non-salaried people also. Therefore, having a PPF account is a wise decision, as per my viewpoint.
    Tell me if I am wrong somewhere.



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