In India, there are a plethora of investment plans that serve different purposes and cater to different income groups. Read on to know more about the best investment plans for middle-class investors.
In India, the middle-class forms the crux of the population. As per the data released by the government of India, nearly 45% of the population belongs to the middle-class. It is no surprise then that most of the investment schemes available in the country are targeted towards the middle-class. Over the years, both government and non-government entities have introduced a plethora of investment instruments to help middle-class families plan their savings for their future.
Some of the best investment plans for the middle-class families in India are discussed below:
PPF – Public Provident Fund
The Public Provident Fund is one of the most popular investment options among middle-class investors. Anyone who is an Indian citizen can open a public provident fund account with a post office and authorised bank and start investing in it. You can invest as low as Rs. 100 per month and earn guaranteed, tax-free returns. The PPF account comes with a lock-in period of 15 years, which makes it an ideal investment choice for long-term goals. However, you must know that the scheme allows partial withdrawal of the corpus after a specific number of years and for specific reasons.
NPS – National Pension Scheme
National Pension Scheme is a government-backed voluntary subscription based investment scheme that aims to secure your life after retirement. Under the scheme, you must invest a nominal amount periodically throughout your working years, and after you attain the retirement age, you get a monthly pension. Thus, it allows you to be financially independent in your post-retirement life.
One of the significant features of this investment scheme is that it provides market-linked returns. This means the amount you invest in your NPS account is invested in money market schemes like equity mutual funds, government securities and bonds and debt funds to generate higher returns. You can withdraw the funds partially (up to 60%) after you attain the age of 60 and use the remaining amount in the account to purchase annuity. Also, the returns earned from the NPS account are completely tax-exempt.
FD – Fixed Deposits
One of the traditional investment options, you can open an FD account with any bank or post office of your choice. In FD, you invest a lump sum amount for a specific period; it can range from 5-20 years or more based on your personal needs and financial goals and earn guaranteed returns in the form of interest. It is also one of the most secured investment schemes and it is an ideal investment for those who have a very low or zero risk appetite.
ULIPs – Unit Linked Insurance Plans
The Unit Linked Insurance Plans are essentially life insurance policies that offer dual benefits of investment and insurance protection. A part of the premium you pay for the policy is utilised for providing insurance cover and the remaining amount is invested in mutual funds to generate returns for the investors.
The returns you get depends on the funds’ performance. However, historically, ULIPs are known to provide higher returns than the interest rate offered by the bank and post-office FDs. It is one of the best investment schemes to have in your portfolio as you have the chance to invest in various mutual fund schemes of your choice as well as secure your family’s future with a single investment.
Final Word
Apart from the above-mentioned investment plans, there are other options like mutual funds, RBI bonds, senior citizens savings scheme, etc. where you can invest your money for your future goals. However, the key to investing and making the most of it is to start early.
