Best investment ideas in India to invest lump sum amount

Best investment ideas in India to invest lump sum amount

Best investment ideas in India to invest lump sum amount

This topic is chosen from “Suggest a topic” which was suggested by one of the reader.

Though there are several investment ideas in India to be chosen for investment, to invest a lump sum amount, all investment options would not work out.

What are the sources of lump sum amount?

Lump sum amount is received from several sources like sale of any asset, annual bonus, incentives, proceeds from any matured fixed deposits, sale of any securities etc.

Do the investment ideas for regular monthly investments differ from investment ideas to invest for lump sum amount?

Yes, they would. For e.g. if you are investing in best stocks on regular basis for long time, all market uptrend’s or downtrends would be averaged out Whereas if you invest in stocks in single transaction, there are very high chances that the stocks you invest would get corrected and your investment amount would come down. It also depends on the timing of the market. Currently Indian markets have reached new highs, hence investing a lump sum amount in single transaction would be risky.

Investment ideas in India to invest lump sum amount:

Now, let us review all the investment options whether they are suitable for lump sum investment or not.

  1. Investments in Mutual funds: Investments through Systematic investment plan would take care of market movements and you would get benefitted in long run. When markets are reaching peak levels, investing lump sum amount in large cap or diversified mutual funds would be little risky. Instead invest in debt mutual funds where only part of the amount is invested in equities and majority portion in debt related securities.
  2. Investments in Post office term deposit: Investment in post office term deposit for lump sum investment would be better option. The interest rates are varying from  8.2% to 8.5% and tenure is from 1 year to 5 years period. Also there is no TDS on interest.
  3. Investments in bank fixed deposits: Interest rates have been falling in the last 1 year. Banks are now offering 7.5% to 9.25% interest rates. Bank Fixed deposits are also good investment idea in India as interest rates are falling in the last 1 year. However the interest is taxable. To that extent, your returns would get reduced.
  4. Post office MIS scheme: Investment in India post office MIS scheme would be better investment idea. The interest rates are 8%+ and the interest is paid every month. If you are looking for fixed monthly income, you can go for this.
  5. Investments in Gold: In the last 1 year, Gold prices have increased from Rs 2,800 to Rs 3,300 for 1 gram. However currently it is getting stabilized at Rs 3,100 per gram. If you are a gold lover, you can invest in Gold ETF’s.
  6. PPF/NSC/Tax saving FD: If you have not yet planned for your tax savings, you can deposit such lump sum amount in PPF or NSC or tax saving fixed deposits. The interests are almost same ranging between 8% to 8.5% p.a.

Investment in company deposits are little risky, hence I would not be opting this as good investment idea in India to invest lump sum amount.

Conclusion: Investment ideas in India would differ from your monthly investments vs lump sum investments. All investment ideas indicated would not be suitable for everyone. Depending on requirement, you can invest by selecting such good investment ideas in India.

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Best investment ideas in India to invest lump sum amount


  • Ravikumar N

    Dear Suresh,

    Adding to my previous comment, I came to know the following option with regard to investing  Lumpsum amounts:

    If you receive any lumpsum amount, put this amount in any good liquid MF and transfer fixed amount from this Liquid MF to a diversified MF (Large-cap or Mid-cap/small-cap, based on the risk apetite of the investor) on monthly basis (STF route). This option sounds good and may receive higher returns compare to the options you have mentioned. Please revert me with your comments.

  • Ravikumar N

    Dear Suresh,

    Thanks for the updates on Lumpsum Investment ideas. However, most of the investments you have mentioned are having tax implications. Can you pls let me know if I want to keep the lumpsum amounts for a short-term period (less than 1 yr), what are the options available for me with least tax implications. I am currently in 30% tax bracket.

    • Ravi, Short term investment options would lower your returns. As per my knowledge there is nothing like least tax implications for < 1 year investment period other than what I specified here.

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