Types of Investment in India

• A CD can be issued to a single issuer for a minimum of Rs.1 Lakh and its multiples
• Maturity period of a Certificate of Deposit issued by the commercial banks can range from 7 days to 1 year. Whereas, maturity period for a certificate of deposit issued by financial institutions ranges from 1 year to 3 years

 Bonds are a type of debt investment that have gained popularity in India. Bond investors lend money to the issuer of the instrument. In the return, the bond issuer i.e. borrower pays interest to the investor at a pre-defined coupon rate till the maturity of the bond. Once the bond matures, the investor receives the original investment back. While most Bonds in India feature a fixed coupon rate, other types of bonds like floating rate bonds and zero-coupon bonds have grown in popularity over the years.

**Tips for investing in bonds in India**

• The bond issuer is required to pay the investor’s principal amount back at the time of maturity.
• Currently, bond investments in India can be made either directly or through Debt Mutual Funds.

• If you are looking to score a higher rate of appreciation, make simple improvements and upgrades to your real estate investment. This can go a long way in increasing the market value of your property
• Understand the additional costs you may have to incur on your real estate purchase. These may include annual maintenance and upkeep outgo, taxation, utility expenses and more

 Fixed Deposits, which are offered by banks and non-banking financial organisations (NBFCs), are an excellent option to grow your funds while maintaining the highest level of safety. Among the different types of investments in India, this remain a popular choice since it allows you to deposit a lump sum cash with your lender and choose a tenor that suits your needs. Following the conclusion of the pre-determined tenor, your deposit begins collecting interest at the interest rate you locked in for the duration of your deposit.

**Investment tips for Fixed Deposits**

• If you are looking to score a higher rate of appreciation, make simple improvements and upgrades to your real estate investment. This can go a long way in increasing the market value of your property
• Understand the additional costs you may have to incur on your real estate purchase. These may include annual maintenance and upkeep outgo, taxation, utility expenses and more

  Mutual funds (MFs) invest in market-linked instruments such as stocks, bonds, or a mix of both equity and debt instruments. The different types of investors in India can choose between equity funds, debt funds, and balanced funds depending on your financial goals and requirements. Furthermore, you can also invest small amounts periodically in MFs using a Systematic Investment Plan (SIP).

**Investment tips for Mutual Funds**

• Review your risk preferences before choosing from the different types of investment options. Invest in equity mutual funds if you have a higher risk appetite; for conservative investors, debt schemes are ideal. The options exist to suit the preferences of varying types of investors in India.
• Understand the prevalent taxation system before investing. You can invest in tax-saving mutual funds such as the ELSS (Equity Linked Savings Scheme) to help maximize your returns

• PPF interest is calculated on the basis of the minimum balance in one’s PPF account between the 5th of the month and the month end. Thus, you should make it a practice to invest before the 5th of every month
• Investing in a PPF through a bank that provides the facility of online transfers is a must. This spells convenience and efficiency for investors and helps facilitate regular contributions.

The National Pension System (NPS) is another investment plan backed by the government of India. It falls under the types of investments in India that focuses on saving for the long term, making it the perfect addition to your retirement investment plan. NPS investments can be diversified across 4 key asset classes – Equities, Government Bonds, Corporate Bonds and alternative investment funds (AIFs). As per current rules NPS investments are eligible for superannuation after the investor attains the age of 60 years. However, NPS investors can continue their investments up to the age of 75 years without superannuation.

**Investment Tips for PPF**

• Make the most of your NPS investment by claiming the applicable tax benefits
• NPS contributions are investment types that qualify for deduction under section 80CCD (1), 80CCD (1B), and 80CCD (2) if the individual opted for the old tax regime
• You can choose from two different types of investment choices i.e. active choice or auto choice. In an auto choice investment, the proportion of investment in different asset classes is predetermined. In active choice, you can determine the asset allocation, as per your preferences. If you are financially adept, you can go for the active choice types of investment options. If one doesn’t possess the required financial literacy, auto choice would prove ideal.

 Unit Linked Insurance Plans (ULIPs) are among types of investments in India that come with tax benefits as well. It is an instrument that offers you the advantage of investment combined with insurance. The premium you pay to remain invested is divided into two portions. One part goes towards providing you a protective life cover, while the other is invested in market-linked instruments or funds. ULIPs also provide deductions under Income Tax Act 1961 as per prevailing tax laws, since the premium paid is deductible, and the maturity benefits and long-term capital gains are tax-free.

**Investment Tips for ULIPs**

• Make note of the charges you may incur upon investing in these types of investment. These may include premium allocation charges, administrative charges, fund management charges, mortality charges and more. Invest in a ULIP from an insurer provider that levies a minimum amount of charges
• Opt for a ULIP that provides an optimum amount of flexibility. You should pick a plan that offers flexibility in terms of premium payments, customizable plans with different fund options. To cater to the needs of different types of investors in India, ULIPs allow the ability to easily redirect your premiums and switch funds, according to market movements and evolving risk appetite.
• ULIPs are investment types that offer flexibility to opt for an asset allocation strategy depending on the risk appetite and goal in mind. Policyholder can opt for a fixed proportion to be maintained in equity and debt throughout the policy term.

• While investors do have the option of premature withdrawal, they must bear in mind that a penalty charge ranging from 1-1.5% of the deposit will be levied
• While the SCSS provides a high rate of interest as compared to other fixed income instruments, this interest rate may be subject to change based on a quarterly review. Investors must keep track of this rate of interest.

• There are different types of investors in India, hence, it is crucial to identify your tolerance for risk. The types of investments you choose will depend greatly on your risk tolerance.
• Use an investment calculator to get a rough estimate of how the instruments you are planning to invest in will yield returns after their term is up. There are many investment calculators available for free online
• Chart out your short-term and long-term financial goals, and pick the different types of investments that align with those objectives
• Diversify your investment portfolio, so it has a balanced mix of high-risk and low-risk investments
• Ensure that you have a retirement investment plan in place, because it’s important to save for your golden years
• Review the different types of investments in your portfolio periodically to verify if they continue to remain aligned with your personal goals