Investment Options in India
An asset purchased by an individual in order to get some wealthy returns over time is called an investment. People tend to invest more in today's world, is to secure their future short term needs. Common investments are :
- Bonds
- Stocks
- Real Estate
- Mutual Funds
The following are the investment opportunities available in India:
Mutual Funds:
The mutual fund is a trust that collects money investors and invest that money into equities, bonds and other marketable securities. The investor has his own unit which shows the holdings of the fund. The income generated from the investment is distributed proportionately among the investors after deducting certain expenses, by calculating a scheme Net Assets Value(NAV).
Public Provident Fund(PPF):
PPF is a tax-free savings avenue which was introduced in the year 1968 in India. The minimum amount one can invest is Rs.500 and the maximum amount one can invest is Rs. 1,50,000. Compared to other fixed deposits and recurring deposits, rate of interest in PPF accounts is pretty high. The Indian Government manages all PPF accounts.
Equity Shares:
This is the main source of funding for any company. This allows the investor for voting rights and claim on assets. In equity, the shares are expressed as face value, issue value, market value. The investment in equity shares guarantees of getting twice or thrice times of the money invested. But also the risk factor here increases.
Real Estate:
The Real Estate investment means the purchase, ownership, management, rental and/or sale of real estate for profit. It is considered as a safe bet by an individual in India. This investment deal with the land and building factor and investments in land and buildings gain high value over the period of time.
Gold ETF(Exchange-traded Fund):
The Gold ETF is generally an investment for beginners or small investors. It consists of only one commodity: gold. Investors use this investment to track and reflect the price of gold. This investment gives an exposure in the price movements of gold. The whole investment is held in electronic format and also offers greater liquidity.
Post Office Schemes:
This scheme includes the list of products that offer the reliability and risk free investment. It is the safest form of investment with no risk. These schemes are operated via 1.54 lakh post offices all over the country.
Unit Linked Insurance Plans(ULIP):
ULIP offers a combination of insurance and investment to the policyholder. Here the policyholder has to pay premium monthly or annually and from that small amount of the premium goes to life insurance and the rest of the money is invested in equities, bonds and other marketable securities.
Initial Public Offerings(IPO):
Here the companies invite the public to buy their shares without getting listed on the stock exchange. Since it is the first time the company is opening investments to public, it is known as Initial Public Offerings (IPO). Generally, companies issue shares at a low rate, but when they get listed on the stock exchange, the prices go up. So if you possess a skill for investment, then IPO is worth investing.