Most common question I received now a day is “I have 1 Lakh rupee for the investment. I want quicker and profitable returns. Where I should invest it?” Well, an answer to this question depends upon your risk appetite and multiple other factors.
However, I believe that you are the smart investor and you want to get a maximum possible return in the realm of safety with some risk.
So, here is 10 Best ways for investing 1 Lakh for good returns including Flowchart that to help you in investing.
10 Best Ways For Investing 1 Lakh – Flowchart
#1 Mid-cap, Multi-cap Mutual Fund
The first best way to invest 1 Lakh for the good returns is Midcap or Multi-cap Mutual Funds. Investment in these type of mutual funds is a risky affair and may not be suitable for everyone. If your risk appetite permits you, you can plan to invest in these funds via SIP route.
You can expect 12-18% return from these type of Mutual Funds.
If you have not exhausted your 80 C limit, the best way to invest 1 Lakh rupees for you is ELSS. ELSS is one of the most popular tax-saving investment options. ELSS gives dual benefits you can enjoy capital appreciation along with tax saving. However, ELSS comes with 3 years lock in period. You will not able to redeem ELSS fund till 3 years.
ELSS can give returns in the range of 10-12%.
#3 Hybrid Fund
Hybrid Fund is next investment option where you can plan to invest 1 Lakh rupee. Hybrid mutual fund is the best investment option for the investor who is looking for safety and moderate returns. Hybrid fund follows the principal of balancing they divide the funds and invest in equity and debt both. So, you can enjoy best of both worlds by investing in balance mutual funds.
Balance Mutual Funds can generate a return in the range of 10-13%.
#4 FMP or Debt Fund
If you are looking for the safety of capital and if you have exhausted your 80 C limit FMP (Fixed maturity plan) and Debt fund is ideal for you. FMP is kind of fixed deposit in terms of tenure but varies in terms of assured returns. FMP are closed ended schemes. On the other hand, debt mutual funds are funds which mainly invest in fixed income instrument and government securities.
You can expect 9-10% returns from FMP or debt fund.
Equity investment is one of the best ways to invest 1 lakh rupees. Investment in equity can bring ultra-high returns. However, investment in equity is very risky and you may end up losing money also. So it is high risk, high return game.
This investment option is best suited for the aggressive investor. Stock selection and timing are most important creation for investment. Stock market investment requires extreme care and enough knowledge.
#6 Public Provident Funds
Public Provident Fund (PPF) is one of the best tax saving investment options for the long-term perspective. PPF provide slow steady and secure return. You can open PPF account at any bank. Tenure of PPF account is 15 years and that can be extended for 5 years more. The current Interest rate applicable to PPF account is 7.1% (As of March 2022).
#7 Sukanaya Samriddhi Scheme
Sukanya Samriddhi Scheme is saving scheme for the girl child by the government. You can open Sukanya Samriddhi Account at any bank or post office. Tenure of SSA account is 21 years from the date of opening. You need to deposit money in this account for 14 years. This account can be open on girl child name. Age of girl child should be less than 10 years. The current Interest rate applicable on SSA account is 7.6% (As of March 2022).
#8 Bank Fixed Deposit & Tax Saver Deposit
If you are a conservative investor with low-risk appetite and happy with small returns you can plan to invest 1 lakh rupee in bank fixed deposit. Bank fixed deposit gives fix returns to the investor. The tenure of FD can vary from 7, 15, 30, 45 days to 3, 6 months, 1 year, 1.5 years and 5 years. The interest rate depends upon time period and varies from bank to bank. One important point to remember here is income earned from interest is taxable. If you have not exhausted your 80 C limit, you can plan to invest in Tax Saver Deposit. However, this deposit has lockin period of 5 years.
Also Read – Sukanya Samriddhi Scheme Calculator
#9 Tax-Free Bonds
The next option to invest your 1 lac rupee is the tax-free bonds. Tax-free bond is a secure way of getting returns on your investment but not as good as fixed deposits. Tax-free bonds are bonds are issued by entities such as the National Highway Authority of India (NHAI) and Power Finance Corporation (PFC) as they are important to the government in terms of building the country’s infrastructure.
Money invested in tax-free bonds will be locked for 15 years. As per me if you surplus money you can think of this investment option. This option can give an absolute return of 7.2%-7.3% every year for 15 years.
The last option to invest your 1 lac rupee is Gold. Gold is considered as a safe haven against all national, political and cultural crises. Gold has produced a magnificent return in past and we expect gold to continue in appreciation. I would like to specify here that gold Investment should not exceed 20% of your portfolio. You can invest in gold in two forms
(1) Physical Gold – Jewelry, Coin or Bar (2) NonPhysical Gold – Gold ETF.
Note- Please do not put all the eggs in one basket. It is smart idea to divide this money into several parts and invest in few best suitable investment options based on your financial goal. However, if you are looking for a logical answer to arrive at a conclusion where to invest 1 Lakh here is simple flow chart showing “Best Ways to Invest 1 Lakh”.
Over to You –
Ask yourself these questions before investing?
- What is a goal behind Investment?
- What is the amount you afford to invest every month/year for this goal?
- What Investment options available & which is best suited for me?
- What is my understanding of these investment options?
Hope you have got an answer to your question where to Invest 1 Lakh for good returns?
Do share your opinion in comment section given below.