Best High Return Investment Options in India
These days, everyone is looking for high return investment options in India. While there are several investment plans, one can choose high return investment options based on tenure, risk appetite and liquidity and taxation point of view. Which are the top high return investment options in India? How you can choose a good investment plan for you which can fetch you high returns in India. In this article, I would help to analyze some of the best high return investment options to invest in India.
How to choose best High Return Investment Options in India?
I don’t just say invest in stocks or mutual funds. Here one should look at several parameters before considering it as a high return investment option.
1) Depends on Tenure: Investment option can vary from a person to person who want to invest for 1 year or 10 years.
2) Depends in risk appetite: A high risk person can invest in stocks, but a low risk investor cannot. Hence, one should check whether it fits his or her risk appetite. High return investment option of investing in Stocks may not always fit for everyone.
3) Liquidity: If you are investing your emergency money or short term investment, liquidity should be high priority. Hence, investment in NCD’s may not be best high return investment option if you are looking for quick liquidity.
4) Taxation: Investment in bank FD Vs investment in tax saving FD schemes would depend whether you are looking for taxation point of view.
Best High Return Investment Options in India
1) Mid-cap and Small-cap mutual funds
One of the best high return investment is investing in Midcap and small cap mutual funds. Midcap and small cap mutual funds invests in midsized or small sized companies which have potential to grow money in short to medium term. Some of my favorite mutual funds in this segment are Franklin India smaller companies fund, DSP BR Micro fund, HDFC Midcap Opps fund, Mirae Emerging blue chip fund etc., You can refer more top midcap and smallcap mutual funds in this segment here.
Who can invest: Investors who can invest medium to long term of 5 to 10 years can consider this as one of the best investment options to get high returns.
2) Company Fixed Deposit Schemes
There are several company FD schemes where you can get a yield of as high as 12% per annum. You can look for high return company FD schemes and invest in them. Here are some of the top company FD schemes.
- The Bajaj finance FD scheme offers interest rates of 8.7% to 8.9% per annum. Annualised yield works out to be 10.63%
- DHFL Aashray Deposit Plus FD scheme offers interest rates of 8.5% to 8.75% per annum. Annualised yield works out to be 10.4%
- The LIC HFL FD scheme offers interest rates of 8.25% to 8.5% per annum. Annualised yield works out to be 10%
Who can invest: Company FD schemes carry high risk. Investors who are willing to take high risk and want to invest money for short to medium term of 1 to 5 years can invest in these high return company FD schemes.
3) Investment in Stocks
Investment in direct stocks would give high returns. An investor can invest in stocks that fits with warren buffet principles and expected to give superior returns in India.
Who can invest: High risk investor willing to invest in a medium to long term tenure of 5 to 10 years can look Stock investment as a high return investment option.
4) Non Convertible Debentures (NCD)
Non Convertible debentures are issued by companies for medium to long term funding requirement. These are generally secured and unsecured NCD’s. Secured NCD’s are backed up with assets like receivables, etc., hence carry low risk. DHFL Secured NCD’s got oversubscribed twice in Aug and Sep-16 on day-1. This shows investor interest in NCD’s. If you have missed to subscribe them you can buy them from the secondary market (like any other stock), however they might be available at some premium. Keep checking our blog for latest NCD issues so that you can subscribe to get them high return from these NCD’s.
Who can invest: High risk investors who are willing to invest for short to medium term can invest in these NCD’s. One of the Best High Return Investment Options.
5) Peer 2 Peer Lending
This is a new emerging investment option. In this an individual instead of investing in fixed income schemes, they would lend money to a person who needs it. These are being arranged by some of the P2P lending companies like faircent etc., Interest rates would range between 8% to 24% depending on the risk profile of the borrower. I would cover more info about Peer 2 Peer Lending in coming weeks, giving complete facts, pros and cons of this best high return investment option.
Who can invest: One of the nice way to get higher returns on your investment option. However, this is one of the high risk investment options as it depends on borrower who need to repay your money back along with interest.
6) ELSS funds for tax saving option
If you are looking for tax saving along with growing your money, then the best way to get higher returns is to invest in top ELSS funds. While PPF and other tax saving options give returns up to 8% returns, good ELSS mutual funds can fetch you up to 12% returns. You can look for Axis Long Term Equity fund, DSP BR Tax Saver fund, Franklin India Tax shield fund etc.,
Who can invest: Investors who can take some risk, but expecting to get high returns up to 12% along with tax savings u/s 80C, can invest in these top ELSS funds.
7) Invest in Debt Funds rather than bank FD
If you are looking to invest in fixed income investment option, instead of investing in bank FD, you can look for debt funds. For short term of 1 month to 1 year, liquid funds can fetch you higher returns of 4% to 10% per annum. For medium term of 1 year to 5 years, short term and long term debt funds can give you high returns. I have been investing in short term to long term funds and in last 1.5 years, I got returns of over 15%. This is the smart way to invest your funds. Some of the best liquid funds are HDFC liquid fund, ICICI Pru liquid fund, Kotak Liquid plan fund etc.,
8) Invest in Low Cost ULIP
Prior to 2010, ULIPs had more than 35% premium allocation and other charges for the first year and up to 8% at later years. Now it gradually reduced and you can see that some of the ULIP’s are now offered with zero premium allocation charges. These new online ULIP’s invest in debt and equity and provide higher returns up to 12% per annum. If you believe investing in ULIP is a good option, consider investing in low cost ULIP’s like HDFC click 2 retire plan etc.,
9) Tax Free Bonds for higher post tax returns
You might be investing in bank FD or NCD’s. However, if you are high tax bracket, this would give you low returns of below 6%. If you are in 30% or 20% tax bracket, the best way to get tax free returns is investing in tax free bonds. Last year, tax free bonds offered up to 9% returns. Now in this year, new tax free bond issues are offering only around 7.5%. Consider investing in tax free bonds either by direct issue or from secondary market which are available at some premium rates now. These can help you to get high tax free returns in India.
Who can invest: Investors who are at 20% or 30% tax bracket and expecting to invest in fixed income option can consider these tax free bonds as one of the best investment options.
10) Post Office MIS Scheme
Post office MIS offers fixed returns per month for 5 years. Currently PO MIS offers 7.8% returns per annum. One of the good investment option to get monthly fixed income.
Who can invest: If you are in low tax bracket and low risk take and want to invest lump sum and get fixed returns per month, you can look for this option.
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Suresh Best High Return Investment Options in India