Best Investment Options for High Return – Safe and High Returns Investment Options.
Understand Best Investment Options for High Return – Safe and High Returns Investment Options for Beginners, Students, Salaried Monthly Income Person.
Best Investment Options – Where to Invest Money for High Return?
There are many investment options available today. One has to pick the right investment tool based upon his or her saving, investment capital, risk profile etc. If you can handle the risk of volatility in stock market then you can invest in stocks. If you don’t want to take that risk then you can invest in fixed income securities.
When selecting the best and right investment option for high returns, one has to remember that risk and returns are directly proportional to each other. The higher the risk, the higher the returns. The more risk you take, the more money you will make.
Following are some of the Best Investment Options:
| S. No | Investment Type | Return | |
| 1. | Equities | : | Dividend and Capital Appreciation |
| 2. | Mutual Fund | : | Dividend and Capital Appreciation |
| 3. | Bond | : | Yield |
| 4. | Bank FD | : | Fixed Interest |
| 5. | Real Estate | : | Rental Income and Appreciation |
Below is a brief explanation of the different investment options.
Check Out:
Equities
Investment in shares of companies is called investing in equities. One can buy or sell stocks from stock exchanges (secondary market) or via IPOs – Initial Public Offerings (primary market). You can earn revenue from equities in following forms:
- Dividend: Periodic payments made out of the company’s profits.
- Growth: The price of a stock appreciates and you can sell them for profit.
If you can manage your portfolio well with precise timing then you can expect a return between 15% to 40% or or even higher. Selecting the right company and the right stock at the right time is the secret to success in this kind of investment. Bad selection of shares and wrong timing can even result in loss.
Learn:
- What is Equity Investment?
- Portfolio Vs Age – Portfolio and Age Relationship
- How Stock Market Works?
Mutual Fund
These are open and close ended funds operated by investment companies. These companies raise money from general investors and invests in a group of assets with a predefined set of objectives. These investment companies hire experts and professionals for money management.
Mutual funds are great substitutes for beginners who don’t want to take big risk by directly investing their money in the share market. Mutual funds can generate a return of around 15% – 30 % which is much more that bank deposits and bonds.
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Bonds
It is an instrument for fixed income(debt). Bonds are issued by governments for a period of more than 1 year for raising capital. A bond is a promise to repay the principal along with fixed rate of interest on a specified date (maturity date). Returns on such investment is much less than equities but it is safe and risk-free.
Other such fixed income instruments are – Bank Fixed Deposits (FD), debentures, preference shares etc.
Also Read:
Certificate of Deposits
These are short-term to-medium-term interest bearing, debt instruments offered by banks. These are low-risk, low-return investment options. Savings account, fixed deposits, recurring deposits etc are some examples. Average rate of return is generally between 4-8 %.
Cash Equivalents
Instruments like treasury bills and money market funds are equivalent to cash and can be easily converted into cash as and when required.
Other Investment Options
There are several other investment options like gold, silver, real estate, foreign currency etc.
Also Read:
- How to Set Investment Goals?
- Diversified Portfolio – Why?
- How Much Money to Invest in Stocks and Mutual Fund
Investment FAQs
What is Investment and its Types?
I have already Explained it Here: Types of Investment
What are the 4 Types of Investments?
4 Types of Investment are:
- Growth Investments: These are long-terms investments for capital appreciation. Examples - Growth Stocks, Real Estate Property.
- Defensive Investments: These are Low Risk Regular Income Generating Investments. Example - Cash Investments and Fixed Interest Investments.
- Cash Investments: Defensive Investment. Examples - Savings Bank Bank A/Cs, Term Deposits.
- Fixed Interest Investments: Defensive Investment. Examples - Government Bonds.
Stock Market Sectors - 4 Major Sectors and 11 Sub Sectors
How do I invest my Money?
- Decide on the Type of Investment you want to make - Growth (Long-Term Stocks or Real Estate) or Defensive (Cash or Interest Investment).
- In order to Invest in Real Estate Property, you will need huge finance.
- For Investment in Growth Stocks, you will need a Demat Account with a Trading Account linked with a Bank Savings A/C.
- For Cash Investment open a Bank FD to earn Interest.
- For Fixed Interest Investment, buy Bonds.
How do Beginners Invest?
Beginners can start with Low-Risk Investment Options such as Mutual Funds via SIP or Cash Investment such as Bank FD. Once they gain knowledge and experience, they can shift to much complex Growth Investment Options.
What is Difference Between Savings and Investment
| Savings | Investment |
| It the money you set aside from your income for some particular goal like - Emergency, Education for Children, buying a car, tour or travel etc. No Risk, Less Growth. | Putting your money at a place to allow it to grow and provide returns. Returns can be used for bigger financial goals like - Buying a house, higher education for children etc. High Risk, High Return. |
Types of Investments Based on Risk Profile
| Low Risk | Medium Risk | High Risk |
| Less-Risk, Less-Returns. Examples - Govt. and Corporate Bonds, Treasury Notes, Bank FD. | Moderate-Risk, Moderate-Return. Examples - Preferred and Utility Stocks, Income Mutual Funds. | High-Risk, High-Returns. Examples - Equity Investment, Mutual Funds, ULIPs.etc. |
Life Stages and Investment Plans
- First Job: This is First Stage and START of investment journey for Beginners. Since, you have limited income and savings, you need an affordable Investment Plan that does not require Lump Sum Money. Few good Investment Options for People with First Job are - SIP in MFs, ELSS (equity-linked savings scheme), ULIPs and Term Insurance.
- Marriage: This is the second stage of life. You need to focus of family planning, healthcare and other long-term goals. Few good Investment Option for people in this very important stage of life are - Personal and Family Health Insurance, PPF (Public Provident Fund), ULIP (Unit Linked Insurance Plan) and NPS (National Pension Scheme)
- Child Birth, Buying a House, Children Education: This stage of life demands long-terms Investments to make life secure. Few good Investment Options in this Stage are - ULIPs and Savings Plans.
- Retirement: This is the 4Th stage of Life and Investment. You cannot take high risks. Investment must be safe and secure. Few good options are - Money Back Plans, Bank FD, Immediate Annuity Plans and Unit-linked Retirement Plans.
Learn:
- Portfolio Vs Age – Portfolio and Age Relationship
- Best Investment Options for Senior Citizens
- Best Investment Options in India for Young Age Adults
Conclusion
So, what are the Best Investment Options for High Returns?
Well, the answer is simple. There are so many options – The More Risk you Take, the More Return you Get. The Early you Start, the More Risk you can Take and the More Returns you can get on your Investment.
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Also Read:
- Introduction to Stock Market in India
- Top 10 Best Textile Stocks to Buy in India
- Volatile Stocks – Should I Buy?
- Top 10 Semiconductor Manufacturing Companies in India
- How to Save Money?
- Top 10 IT Companies in India by Market Cap
- What is Rolling Settlement Cycle in Stock Market?
- Best Investment Options in India for Young Age Adults
- How to Invest Like a Professional Expert?
- Digital Gold Investment
- Top 5 Reasons to Invest in Stocks
- Fixed Deposit vs Savings Account – Which is Better Option?
- Top 10 Investment Banks in the World
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