Life Investment Plans For Salaried People

To build a strong financial backbone, one should invest the money in the right financial instrument. Though not every investment guarantees substantial returns, but, if you invest wisely and for a good amount of time, the potential to gain healthy returns is higher. Especially, a salaried person who has to manage investments and expenses within a stipulated Income. Hence, a salaried individual needs to consider amount, risk, risk, and return while determining the best investment option for them.

List of 7 Best Investment Options for a Salaried Person in India 2024

If you are looking for some of the best investment options in India, then you have come to the right place. Because here, we are going to discuss some of the best investment options for salaried people in the year 2024.

1. Equity Funds

Salaried people should consider investing in equity funds if they want a good return. But you should plan your investment in a systematic way while choosing equity funds. Instead of investing your money at a time; you should put in a fixed amount of money every month. With equity funds, you can also diversify your investment according to the risk and your return expectation. If a salaried person wants a healthy return, he/she should invest for a long duration. Since equity funds have diverse portfolios, investors with a moderate risk appetite can invest in large-cap or multi-cap equity funds.

On the other hand, salaried people with a high-risk appetite should prefer to invest in mid-cap and small-cap funds. To lessen the risk in the long term, you should choose SIP mode to invest in equity funds. This is truly the best investment option for a salaried person.

2. Invest in Bank FDs

People looking for their retirement investment options prefer fixed deposit investments because it helps them deposit money with banks for a fixed maturity period (from 15 days to five years & above). This offers a higher rate of interest than a traditional savings account. When it matures maturity, the investor gets a return equal to the principal and the interest earned throughout the duration period. As FDs are secured investments, hence they are the best short-term investment options.

Most banks usually offer a rate of interest ranging from 3 percent to 7 percent for FDs per annum. Salaried people who want higher returns can allocate their FDs across various banks in such a way that their cumulative deposits and fixed accounts don’t exceed the Rs. 5 lakh cap in each of those banks. So, this is truly the best investment option for a salaried person. Salaried people may also open tax-saving FDs to save their income tax as per Section 80c. But your principal amount will only be qualified for the tax deduction. You need to pay tax for the interest amount.

3. Invest in the Public Provident Fund (PPF)

Public Provident Fund (PPF) is one of the most applauded long-term investment options for salaried people who want a safe investment product. Since the Government of India supports it, this is the safest investment option among all, and it also offers a lucrative interest rate. Moreover, this embraces investors with tax-saving benefits under Section 80C of income tax 1961. PPF comes with a maturity period of 15 years; however, you can extend the maturity period for five years and more. You can invest in your PPF account a minimum of Rs. 500 to a maximum of Rs 1.5 lakh per annum. But PPF also has some drawbacks like lack of liquidity and a long lock-in period (minimum 15 years). Partial withdrawals, loans against PPF, and premature closures of PPF are only permitted under certain conditions. The Finance Ministry reviews the interest of PPF every quarter.

4. Invest in Recurring Deposits (RD)

If you are looking for an investment cum savings option, this could be your ideal option for investment. Recurring deposits are for those who want to save regularly over a certain period and are also looking for a healthy interest rate. Under this investment scheme, a certain portion of the money is deducted from your savings or a current account. After the completion of the maturity period, you will get back your invested amount with accrued interest. The interest rate at banks is between 7 percent to 9.25 percent for RD per annum, and at the post office, it is 7.4 percent. This is the best investment plan for salaried employees.

5. Debt Mutual Funds

Debt funds primarily invest in fixed income instruments such as money market instruments, corporate bonds, government securities, etc. Debt mutual funds are less volatile as compared to equity and hybrid funds. Therefore, debt funds offer a higher return than savings and fixed deposits. This is another best investment strategy for a salaried person.

6. National Savings Certificate (NSC)

Under this investment scheme, the lock-in period is 5 years. And you are eligible for tax deduction under Section 80C. Since it is monitored and managed by the Finance Ministry; hence, this scheme offers a guarantee in investment. However, the Ministry reviews the rate of interest quarterly, and you need to pay tax for the interest component earned from the last year’s investment.

7. Voluntary Provident Fund (VPF)

This is the extension of the employee provident fund (EPF) and is ideal for those low-risk appetite salaried employees who want sovereign guarantees and tax efficiency. Under this scheme, EPF investors can voluntarily invest over their mandatory EPF contributions for up to 100% of their special allowance and basic salary. The rate of interest is the same as EPF, and it is revised quarterly.

Conclusion

These are some of the best investment plans for salaried people in 2024 that are ruling in the market. If you are also looking for some investment options, then you might opt for any of them.