(Last Updated: May 14, 2019)

What are best investment options for salaried person in India?



  • @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.



  • @Tarun A good basket of Debt and Equity is a well tried and tested formula. Mutual Funds, PPF, other debt instruments, all are equally important in designing a well rounded portfolio regardless of whether you are a salaried person or business



  • @Tarun @Ishu I feel one should plan and invest in a house as soon as possible. If you already have one, that's great. But, if you don't have you must think of getting one.

    For salaried people especially middle class, it is a dream come true if we have our own house. I am from the same background and I can feel the pinch of living in a rented house since my childhood days.
    Now, I have a good job. So, I am thinking of putting my surplus money into my own house. I am applying for loan also since I don' t have that much investment to put.
    So, if you ask me, "investment in my own home" shall be the best for me. Everybody has their own priorities. It's just that best investment options can vary from person to person 🙂



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

    Although, I believe for senior citizens FDs is a decent option. But, for young salaried persons, one can look beyond FDs as well.<

    100% agree. Seniors should not invest heavily on equity as it requires long term to generate wealth. Debt Funds + FD are good options for them.

    Guest said in What are best investment options for salaried person in India?:

    @Tarun A good basket of Debt and Equity is a well tried and tested formula. Mutual Funds, PPF, other debt instruments, all are equally important in designing a well rounded portfolio regardless of whether you are a salaried person or business

    Sure it doesn't hurt to have all eggs in different baskets. The most important part (for young especially) is to focus on the goals that one needs to achieve. Not based on parents' money but on your early investment.

    Shalini-Chopra said in What are best investment options for salaried person in India?:

    @Tarun One thing, I want to point out is PPF shouldn't be equated with mutual funds.
    No no, what I generally meant is that MF also offer the same tax deduction + tax free option like what PPF has. That's ELSS fund.

    No no, I just took PPF on the view of 80C tax deduction and tax free returns which Mutual Funds offers the same. In fact, PPF has a locked-in period for many years, but ELSS MF has a 3 years lock-in period. That's another advantage.

    Rajiv-Mishra said in What are best investment options for salaried person in India?:

    @Tarun @Ishu I feel one should plan and invest in a house as soon as possible. If you already have one, that's great. But, if you don't have you must think of getting one.

    For salaried people especially middle class, it is a dream come true if we have our own house. I am from the same background and I can feel the pinch of living in a rented house since my childhood days.
    Now, I have a good job. So, I am thinking of putting my surplus money into my own house. I am applying for loan also since I don' t have that much investment to put.
    So, if you ask me, "investment in my own home" shall be the best for me. Everybody has their own priorities. It's just that best investment options can vary from person to person 🙂

    Indeed having a home is a perfect place for you and your family. Try to make it as asset, not as liabilities.
    Let me share a suggestion, and not sure if it's good or bad for you. If it's a residential house, discuss with your family if agree to rent out 1 BHK or 2BHK to have another fixed monthly income (just to have a convenient additional income against your loan or monthly bills or investment for future). Otherwise, you don't have to and manage in some other ways. Peace!



  • @Tarun Hey, You just summed up my post in few words 🙂 "Don't put all eggs in one basket" as per a common saying. So, it will definitely turn to be more fruitful if one invests at different places rather than in one type of investment only. The best idea to follow is to invest as per our own:

    1. Financial goals: Short term and long term
    2. Risk tolerance: analyse how much risk taking capacity one has. No risk, low or moderate risk or high risk. You'll get the choice of investments options there itself.
    3. Surplus funds: How much money one is willing to invest?
    4. Period of investment: For how long you wish to invest, very short, moderate or longer time period.

    Once we ask ourselves answers to the above 4 important queries, choosing the right investment becomes much easier. Right! Anything you wish to add upon, feel free to do so.



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