It may be necessary to hedge your portfolio from sudden financial shocks by following a risk-based approach to preparing yourself against the many emergencies and exigencies that might surprise you. In addition to age, duration, risk-taking capacity, and other factors, investment options are determined by various factors. 

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Investing should be done with a view to diversification. Indian investors have many options when it comes to investing. The share market, mutual funds, and real estate are some of the most popular terms of the best investment options. Aside from investments, there are also savings options like fixed deposits, insurance, PPFs, government bonds, and corporate bonds.

Public Provident Fund (PPF)

Government-backed fixed-income schemes are risk-free best investment options since the government guarantees their returns. There are several features to it, including:

Availability

• Post offices and banks across India carry this product.
• One account can be opened at a time.
• There is no age restriction for opening an account. Their guardians handle minors’ accounts until they turn 18 years old.

Investment Amount

• An annual investment of 500 INR is the minimum amount.
• An annual maximum of INR 1.5 lakh is allowed.
• The number of times you can deposit in a financial year varies from one to twelve.

Return on Investment

• There is a current fixed deposit interest of 7.10 percent.
• PPF interest rates can change every quarter since they are floating rates. Interest rates generally change between 0.25% and 0.75%.

National Savings Certificate (NSC)

The NSC is a fixed-income investment scheme that is backed by the government and regarded as a risk-free investment.

Availability

There are public banks, private banks, and post offices throughout the country where you can buy the certificate.

Investment Amount

• There is a minimum investment requirement of INR 1000.
• Investing any amount in multiples of 100 in 12 instalments within one financial year or in one lump sum is possible.
• There is no maximum investment amount.

Return on Investment

• Every quarter, the Ministry of Finance announces the rate at which interest compounds.
• A maturity fixed deposit interest payment is made at the end of the maturity period.

Government Bonds

In order to encourage domestic participation in the sovereign bond market, the Indian government has opened up direct bond purchases for individuals. Previously, individuals could trade in government bonds only through mutual funds.

Availability

• Announcing the bond auction ahead of time is the government’s practice. Governments at all levels issue these bonds, including state governments.
• A State Development Loan is referred to as a State Development Loan, while a Center Development Bond is referred to as a G-Sec.
• You do need to have a bank account before you can purchase government bonds. Demat accounts are available for holding government bonds.

Investment Amount

• When the government announces bonds, it announces their price as well.
• G-Sec investments are easy with the e-Kuber App, which India’s central bank uses, the Reserve Bank of India.
• As an alternative, commercial banks and primary dealers are listed by the government for this purpose. You will need to open a securities account to do so.
• As well as stock exchanges, you can buy it there. This purpose can be accomplished online through NCB-GSec, the Bombay Stock Exchange’s platform.
• To buy it, you can also use a brokering platform.
• In addition, you can invest in mutual funds that hold government securities. Government bonds are the investments of these funds.

Return on Investment

• Bonds issued by the government are usually fixed-rate bonds, meaning they have fixed interest rates throughout the bond’s duration.
• You receive half-yearly fixed deposit interest for the specified bond holding period, depending on the coupon rate at the time of purchase.
• Any capital gain (or loss) will occur if the bond is sold or matures.
• An interest-on-interest income is derived from reinvesting interest payments.

National Pension Scheme (NPS)

In this scheme, those who wish to build a robust retirement fund invest their savings into a government-administered pension fund, which invests in diversified stock market portfolios, including government bonds, corporate debentures, and corporate shares. As a result of these investments, the returns or accumulated pension wealth are used to purchase a life annuity, and you may withdraw a portion of the pension wealth at the end of the scheme cycle.

Availability

• The age limit for investing in the stock market is 18 to 65 years old for Indian citizens.
• The PFRDA (Pension Fund Regulatory & Development Authority) appointed can visit points of presence (POPs) to open an account. Alternatively, you can access the eNPS web portal.
• You receive a 12-digit number after opening an account and creating a permanent retirement account.

Investment Amount

• A deposit of 500 INR is required to open this account.
• The account must be maintained by depositing at least 1,000 rupees a year.
• The amount you can invest each year has no upper limit.
• You cannot withdraw your investment amount until you are 60 years old.

Return on Investment

• Pension funds of various banks declare net asset values used in calculating returns.
• The return on your investment depends on how it has performed over the years and is not predetermined.