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Top 10 Long Term Investment Options in India

Shitanshu Kapadia
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Top 10 Long Term Investment Options in India

What are the best long term investment options in India? The average Indian always tries to find an answer of this question and sometimes he ends up making a big mistake while selecting Best Long Term Investment Option.

long term investment options

Let me share one incident with you. My relative was looking for long term investment option. He got advice from so call financial adviser to invest in penny stocks. He was new to stock market and without understanding consequences of investing in penny stock he invested money in few penny stocks. As an end result, he ends up making huge losses. Lesson learned from this incident is one should be cautious while selecting investment option.

So, if you are planning to make long term investment and don’t want to make any mistake here is list of Top 10 Long Term Investment options in India.

Top 10 Long Term Investment Options in India

Public Provident Fund (PPF)

Public Provident Fund (PPF) is one of best long term investment options in India. PPF account can be opened by Indian resident at any authorized bank or post office.

Key features of PPF scheme

  • Annual Deposit amount – Rs.500 to Rs. 1.5 Lakhs per year
  • Tenure – 15 years
  • Interest rate – The interest rate is announced by the government from time to time.
  • Withdrawal – Partial withdrawal is allowed after 7 years.
  • Tax Benefit – The deposit amount can be claimed under section 80 C. Interest amount will be tax free.

Why Public Provident Fund is Best long-term Investment option?

PPF is one of the best investment options for long term as it offers multiple benefits to the investors.

  • Tax free returns
  • Low risk investment option with good returns
  • Useful for building retirement corpus

Also Read – 10 short term investment options in India

Sukanya Samriddhi Account

Sukanya Samriddhi Account (SSA) is next in the list of best long term investment options in India. Sukanya Samriddhi Account is launched to take care of education and marriage need of girl child. This account can be opened only on the name of girl child with age less than 10 years.

Key Features of Sukanya Samriddhi Scheme

  • Maximum Age limit  – 10 years
  • Annual Deposit amount – Rs.500 to Rs. 1.5 Lakhs per year
  • Tenure – 14 Years
  • Interest rate – Interest rate will be declared by the government time to time
  • Maturity -21 Years from date of opening account
  • Withdrawal – 50% withdrawal is allowed for the higher study after 18 years of age of girl child

Why Sukanya Samriddhi Account is Best long term Investment option?

Sukanya Samriddhi Account offers following benefit to the investor.

  • Attractive returns
  • Low risk Investment option
  • Tax Free returns
  • Useful for child education and marriage

National Pension Scheme (NPS)

National Pension Scheme is best retirement scheme for the long term investment. This scheme is regulated by PFRDA. All individual between age group of 18 to 60 years can join NPS.

Key Features of NPS

  • Amount of Investment – Minimum 6000 Rs. No limit for maximum investment
  • Returns – Depends upon % of investment in equity and debt
  • Tax Benefit – Up to Rs 50,000 under section 80CCD(1B) in addition to Rs 1.5 lakh under section 80C.

What benefit NPS offers to the investors?

  • High returns compare to traditional option as part of money is invested in equity.
  • Choice to select investment option, fund manager and annuity plans.
  • Offers multiple tax benefits.
  • It is portable account NPS account number remains same incase of change in employment.

Diversified Mutual Fund

Diversified Mutual Fund is next in the list of long term investment option. Mutual fund is best for the investor who is new to stock market and don’t want to risk the money. Mutual funds are managed by professionals.

Good mutual funds generally give very good returns to the investors. In addition to that mutual funds also offer liquidity, diversification and convenience to the investor.  You should invest your money in the mutual funds.

Benefit of Mutual Funds

  • Professional Management
  • Liquidity
  • Diversification
  • Good Returns

Stock Market Investment

Stock Market investment is next best long term investment option. Stock market investment can make you wealthy provided you invest in right stock at right time.

Example – If you have invested in Infosys IPO in the year 1993 you would have got 100 shares by an investment of 9500 Rs. After 6 bonus issues and 1 stock split, you would be holding 25,600 shares of Infosys today. The value of these stocks would be Rs 3 Crore (excluding dividend).

Another example is Stock guru Rakesh Jhunjhunwala. He has made portfolio of 5000 Cr from 50 Rs. Stock market investments gives benefit of liquidity and diversification. Knowledge and expertise are extremely important while making stock market investment.

Why Stock market is best for long term investment?

  • Best returns over the long term
  • Tax Benefits over long run
  • Liquidity
  • Diversification

Business or Startup

Next best long term investment is startup. Startup companies are like rising sun with huge upside potential and increase in valuation. A Small startup like Alibaba has made Jack Ma richest businessman in China. So, that is the power of startup. A Valuation of startup companies are increasing day by day. A prudent investor should invest in good startup company to make their money work.

Real Estate

Real estate is most popular investment option of India. Long term investment in real estate pays very good returns. However, you need to be careful while making investment in real estate. Real estate investment requires legal expertise and lot of black money. In addition to that location, facilities and age of property plays important role in deciding price of real estate. Don’t be in hurry to make investment in real estate. If required take help from experts.

Gold

Gold a yellow shining metal is also in the list of long term investment option. Gold is considered as a hedge against inflation. You should keep gold in your portfolio. However, as a thumb rule it should not exceed 10% of your portfolio value. Best recommended way to invest in gold is through Gold ETF. Gold ETF gives multiple benefits to the investor like –

  • No requirement of physical storage
  • Easy to buy and sell
  • No making charges
  • No chance of damage or theft

Fixed Deposit

Fixed deposit as name suggests it gives fixed return to the investor. Fixed deposit is best investment for the conservative investor. Fixed deposit is offered by bank and company. Anyone can invest in the fixed deposit. Fixed deposit offers following benefits.

  • Ease of operation withdrawal and availability
  • Capital safety
  • Reasonable interest rate

Recurring Deposit

Recurring deposit is special type of term deposit offered by bank. Recurring deposit allows you to deposit a fixed amount every month. Recurring deposit earns interest at the rate applicable to the fixed deposit. You can generate very good return over a long term by investing in recurring deposit.

Over to You –

Select your investment option carefully. Make sure investment option selected by you in aligned with your investment objective, your risk profile and age. If you are reaching retirement age it is better to select conservative investment option like fixed deposit or recurring deposit and if you are young you should opt for equity, mutual funds.

Hope this post about Top 10 Best Long term Investment options in India was useful to you. Do share your views in the comment section.

NPS Mobile App for National Pension System Subscribers

Shitanshu Kapadia
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1
NPS Mobile App for National Pension System Subscribers

NPS mobile app

New NPS Mobile App is released recently by NPS for the NPS subscribers. This mobile app is available on ‘Google Play Store’ as ‘NPS by NSDL e-Gov’ for installation and use. A launch of NPS Mobile App is a very good step taken by PFRDA to make NPS scheme user-friendly. This app allows you to get your account information on the move. In addition to this, it also gives you multiple other features.

NPS Mobile App Features

View current Holdings

This mobile app allows NPS subscriber to view his/her NPS account details including scheme wise unit holding along with latest NAV and portfolio value.

Request for Transaction Statement for the year on your email ID.

NPS subscriber can request for transaction statement using this application. This statement will be received on register email ID of the subscriber.

Also Read – How to open NPS account online?

Change contact details like Telephone, Mobile no. and email ID & password.

NPS subscriber can change contact details like telephone number, mobile number and email id using this app. Even this NPS Mobile app allows a subscriber to change the password, secrete question and regeneration of password.

View Last 5 contribution transactions carried out

You can get information about last 5 contributions made in your account. This will help you track a balance in your NPS account.

Get notifications related to NPS.

You can also get notification related to NPS on your mobile. It is like subscribing for important information about NPS account related news.

How to use NPS Mobile App?

First, visit Google play and install NPS by NSDL e-Gov app in your mobile.

Once this app is installed on your mobile you will be asked to login using your PRAN number and Password (IPIN). IPIN is internet password sent by CRA to your register address.

NPS Mobile App Login

Once you login to app you can view your current holdings. It will give you information like current holdings, type of account, number of unit held and NAV. If you want transaction statement on your email you need to click on “Email Transaction Statement” button.

NPS mobile app balance

Next, you can visit profile section and change details like Mobile number, telephone number, and email id.It will also allow you to change your password for login from profile setting tab.

NPS Mobile App contact details

NPS subscriber can get last 5 recent contribution details by visiting recent contribution tab.

NPS mobile app contribution

NPS Mobile App is very good initiative and it will defiantly help NPS Subscribers.

How to take PPF Loan against account balance?

Shitanshu Kapadia
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1
How to take PPF Loan against account balance?

PPF Loan

Public provident fund (PPF) is one of the best tax saving investment option. If you have PPF account you are entitled to take PPF Loan against your account balance. PPF Loan is available at low interest for the shorter duration.

Imagine a situation where you need a cash urgently. What do you do? Generally, you approach a bank and take a personal loan. A personal loan is the fastest way to get money from a bank. However, please note that taking a personal loan is a costlier affair. The interest rate charged on the personal loan is very high 14-24% compare to loan against PPF balance. Let’s take a quick look at PPF Loan and its benefits.

Also Read – PPF Account Calculator Download

PPF Loan against account balance

PPF Loan Eligibility

  • PPF Loan can be taken by PPF subscriber after second financial year from the date of the opening account. Suppose you opened the account in FY 2014-15. You are eligible to apply for PPF loan in FY 2016-17. PPF accounts follow April to March as a financial year.
  • You cannot take a loan from PPF account seventh year onwards as you are qualified for the partial withdrawal of money from PPF account.
  • The Loan amount cannot exceed 25% of PPF balance amount.
  • PPF loan is given for 36 month time frame. You can make repayment lump sum or in monthly installment.
  • You can take the second loan once you repay the first loan.
  • The Interest rate charge will be 2% higher than PPF interest rate. This means if you currently applied for PPF loan you will be charge 8.7% + 2% = 10.7% interest.
  • If you fail to repay the loan in 36 months 6% additional interest will be charged.

PPF Loan Benefits

  • PPF loan is low cost compare to personal loan. In case of PPF loan, you will be charged 2% extra interest on PPF interest rate.
  • You need not to produce any document or need not to place anything as a mortgage.
  • Loan prepayment period is 36 month.
  • Prepayment can be made either lump sum or in monthly installments.
  • No prepayment penalty & No pressure of EMI payment.
  • You can avail this loan easily. Processing period of this loan is one week.
  • No fear of recovery agents.

PPF Loan Schedule

PPF Account Opened20th April 2014
Eligible for PPF Loan1st April 2016
PPF Loan End period31st March 2019
Maximum Loan in FY 2016 -1725% of the balance as on 31st March 2015
Maximum Loan in FY 2017 -1825% of the balance as on 31st March 2016
Maximum Loan in FY 2018 -1925% of the balance as on 31st March 2017
Maximum Loan in FY 2019 -2025% of the balance as on 31st March 2018
Account Eligible for Partial Withdrawal50% of account balance can be withdrawn

How to take PPF Loan?

Follow the steps given below to avail loan from PPF account.

  • Loan against PPF balance can be applied in prescribed form called as FORM D.
  • Fill up the FORM D and submit it to the bank.
  • You need to specify the detail about loan taken previously and PPF account number.
  • You also need to enclose the PPF passbook along with application.

Once you submit the application bank will take 6-7 days for processing your loan.

Repayment of PPF Loan

  • You need to make the repayment of PPF Loan within 36 months.
  • You need to pay principal and interest amount separately.
  • The principal amount can be paid with monthly installments like EMI or on lump sum basis.
  • After the principal amount of the loan is fully repaid, you need to pay the interest amount in not more than two monthly installments.
  • In case the loan is not paid within 36 months 6% additional interest shall be charged. (14.7% as per current PPF interest rate).

Dark side of loan against PPF account balance

  • The loan amount is limited 25% of the balance. If you deposit 1.5 Lac maximum amount for two years you can apply for loan amount Rs.75000. (25% of the balance)
  • You have a very small window of 4 years for availing this loan facility. From 3rd financial year to 6th financial year.
  • If you are unable to pay the loan on time you will be charge 6% additional penalty. This means you need to pay 14.7% interest which is at par to personal loan.

Conclusion –

PPF is long term investment option made for retirement. It is not advisable to stake your PPF saving by taking loan.  You should take PPF loan only in unavoidable circumstances.

Investment Strategies and Tips by Biggest Stock gurus of India

Shitanshu Kapadia
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1
Investment Strategies and Tips by Biggest Stock gurus of India

Everyone sees a dream to make money from the stock market, but due to lack of knowledge and investment strategies they are unable to do so. Today I will share investment strategies and tips by biggest stock gurus of India. Following these investment strategies and tips will surely help you to make money from the stock market.

Rakesh Jhunjhunwala, Age -56

Founder – Rare Enterprise

Rakesh Jhunjhunwala

The big bull Rakesh Junjhunwala is known as biggest stock gurus of India. The success story of Rakesh Jhunjhunwala is known to everyone. He has started making an investment in the stock market from the initial capital of Rs.5000 in 1990’s and by 2016 he has made a portfolio of 13000 Cr. You can go through portfolio of Rakesh Jhunjhunwala from here.

Rakesh Jhunjhunwala Networth – 13000 Cr

Portfolio Value – 9239 Cr

Investment Strategies and Tips by Rakesh Jhunjhunwala –

Never ignore unpopular or small stocks.

You should never invest money based on popularity of the stock. Look at the value of stock while making investment. If small stock has a potential it is good to explore the same.

Invest in what you know.

Keep it simple. Invest money only if you know the business of the company. There is no point in investing money in the unknown company with complex business model.

Diversify your portfolio.

Never keep your all egg in one basket. You should diversify your portfolio by making investment in multiple different sectors.

Check your portfolio twice a day.

It is advisable to check your portfolio twice a day. Make the changes in the portfolio as per requirement.

One cannot create wealth through free advice.

You cannot create a wealth through borrowed advice. You should apply your mind do sufficient research before making any investment. Free advice is good to have but it may cost you more money at the later stage.

Also Read – Rakesh Jhunjhunwala Story from 5K to $3.1 Billion

Ramesh Damani, Age – 60

Founder – Ramesh s Damani Finance Pvt Ltd

ramesh damani

Ramesh Damani is one of the biggest stock market investors and stock guru of India. Ramesh Damani has started making investment when sensex was 600 points. Today he is holding almost every profitable stock in his portfolio.

Ramesh Damani Networth – 6700 Cr

Investment Strategies and Tips by Stock guru Ramesh Damani –

Never invest for short term

You should never invest for short term gain. Don’t become trader try to be long term investor and enjoy the benefit of long term investment.

Keep a close look at all sectors

You should keep your eyes on all the sectors and the news associated with them. News and triggers are important factor in moving stock price.

Check balance sheet before making investment

You should check the balance sheet of the company before making investment. The profit and loss statement history and revenue profile speaks a lot about stock.

Decide exit strategy before purchasing the stock

You should make an exit strategy clear before making investment in any stock. It is very difficult to time the market however, with research and experience you will be able to decide exit strategy.

Also Read – Radhakishan Damani Portfolio Holdings

Raamdeo Agrawal , Age -60

Co-Founder – Motilal Oswal Financial Services Ltd

Raamdeo Agrawal

Raamdeo Agrawal is from Motilal Oswal group. He is most popular and respected stock guru of India. In 1997 when he purchased Hero Honda Stock market cap of the company was only 1000 Cr, but today Market cap of company is more than 60000 Cr.

Raamdeo Agrawal Networth – 800 Cr

Investment Strategies and Tips by Stock guru Raamdeo Agrawal

Understand Difference between buying a Vada Pav and Stock

When you buy vada pav, you never ask for price and you don’t even check the change. But buying stock is different compare to vadapav it is more complex. You must do your homework before buying any stock.

You should follow QGLB

Quality, Growth, Longevity and Bargain value of company matters a most. You should look at all these factors before making investment.

Look at the earning and fundamental of stock

You should look at earning potential and fundamental of stock. If company is making 100 Cr today and expected to make 1000 Cr in next 5 years you should buy that stock.

Also Read – Multibagger Wealth Creator Stocks by Raamdeo Agrawal

Conclusion –

Hope these investment strategies and tips given above will be useful to you in making wealth from the stock market.

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