Best Investment Options in India for 2020

Best Investment Options in India for 2020 - Top Investment Plan for Higher ReturnsBest Investment Options in India for 2020


While 2019 would have left positive memories for some, it is not that attractive for investors. Sensex zoomed to 42K, however, only few stock prices have increased. The majority of the shares or mutual fund schemes have still earned low returns. Many experts believe that some of the investment options can zoom and provide superb returns in 2020. Which are the Best Investment Options in India in 2020? Which is the Top Investment Plan for higher returns in 2020?

Also Read: Top 10 High Return Investments in India

Best Investment Options in India for 2020


Here are the list of best investment plans that are expected to provide higher returns in 2020.

1) Midcap Mutual Funds

2) Smallcap Funds

3) Debt Mutual Funds

4) ELSS Tax Saving Funds

5) Large IPOs that are expected to come in 2020

6) Portfolio Management Services (PMS) in India

7) New Pension Scheme for those who aim for higher returns during retirement

8) Public Provident Fund (PPF)

9) Sovereign Gold Bonds

10) Top Rated Corporate FDs

Best Investment Plans in India for higher returns – Detailed View


Now let us jump into these investment options to see the reasons why these are expected to provide higher returns.

1) Midcap Mutual Fund Schemes


Midcap mutual fund schemes were expected for huge u turn in 2019. However, midcap segment started moving positive only in the last few months of 2019. We expect that midcap segment would bounce back and midcap mutual funds would provide higher returns compared to any other category of funds. Recently Porinju from Equity Intelligence indicated that out of 1,000 midcap and smallcap stocks, up to 40% of the stock prices are expected to get doubled in 2020. We have been re-iterating that if you can invest in some of the top midcap mutual fund schemes of 2020 for long term, these can provide 15% to 18% annualized returns.

2) Smallcap Funds


Like midcap segment, even, smallcap segment has been lagging behind in the last 1-2 years. We expect a bounce back of the small cap segment in 2020 that would benefit small cap mutual fund schemes. If you are high risk investors and willing to invest for long term and expecting 18% to 20% annualized returns, it is the right time to invest in these funds.

Midcap and Smallcap mutual funds are one of the best investment options in India for high risk investors.

3) Debt Mutual Funds


Debt funds have become unfavorable for the past few months due to corporates defaulting in commercial papers and other debt instruments where mutual funds would have invested. However, these are still good investment options who are looking for higher returns compared to FDs. You need to evaluate and pick-up good debt funds to reduce your risk.  Debt mutual funds are one of the best investment option for senior citizen to have stable high returns compared to FDs.

4) ELSS Tax Saving Funds


One of the best ways to save money and get income tax benefits u/s 80c is considering ELSS tax saving funds.  These ELSS funds have 3 years lock-in period. Tax Saving funds are expected to provide 12% to 15% annualized returns if you can invest for 5+ years. Consider investing in top rated ELSS Mutual Funds to invest in 2020.

5) Large IPOs that are expected to come in 2020


There are several IPOs where investors minted money in 2019. IRCTC IPO gave 125% listing gains, CSB Bank gave 53% and Ujjivan Small finance Bank gave 51% gains on listing day. This indicates that investment in Quality IPO’s always been rewarding investors. This trend is expected to continue in 2020. There is a good list of IPOs that are lined-up in 2020. Equitas Small Finance Bank, SBI Cards, Burger King IPOs is expected soon. IPOs are considered as one of the best investment options in India for short term as one can sell these IPOs within 2-3 weeks and make money.

6) Portfolio Management Services (PMS) in India


If you are a high net worth investor and can invest a minimum of Rs 50 Lakhs, you can consider investing in some of the PMS Services in India. PMS is the replica of the mutual fund scheme, however for high net worth investors. Some of the PMS services have provided over 35% annualised returns in the recent times. You can review some of the Best PMS services which we recommended earlier.

7) New Pension Scheme for Retirement


New Pension Scheme is a social security initiative by Govt of India. This is basically a regular saving scheme aimed to provide retirement benefits in India. The allocation would depend based on your age. The higher your age, the lower equity allocation and vice versa. NPS has been providing good returns in the range of 7% to 14% depending on the asset allocation. One can invest upto Rs 1.5 Lakhs in NPS and are eligible for tax benefits u/s 80c. One can invest additional Rs 50,000 and get tax benefits u/s 80CCD that is beyond Rs 1.5 Lakhs tax exemption u/s 80c. NPS could be one of the best investment options for salaried person where one can invest on regular basis instead of lumpsum.

8) Public Provident Fund (PPF)


One of the safest way to save tax and get higher returns is investing in Public Provident Fund (PPF). One can invest upto Rs 1.5 Lakhs in PPF and can claim tax benefits u/s 80c. The current PPF interest rate is 7.9% and this would change quarter on quarter. PPF provides EEE status, i.e. Exempt-Exempt-Exempt category. Deposits made in the PPF are deductible under Section 80C of the Income Tax Act. The accumulated amount and interest are also being exempt from tax at the time of withdrawal.

9) Sovereign Gold Bonds


I have been re-iterating my view on Sovereign gold bonds. Don’t invest in these gold bonds expecting short term or long term appreciation. There are better investment options than gold. If you need gold in the future either for your daughter’s marriage or to be used in the family for gold ornaments, you can consider buying sovereign gold bonds. These bonds provide 2.75% returns per annum and have lock-in period of 8 years. Instead of buying physical gold, buying gold bonds can help you to accumulate gold over a period of time and also earn some interest on it.

10) Top AAA Rated Corporate FDs


Recent DHFL scam has scared investors. If you are high risk investors, investing in some of the top AAA rated corporate FDs could be a best bet. One can expect 7.5% to 9% interest rates from these corporate FDs. Some of the high rated corporate FDs are Bajaj Finance FD, Mahindra Finane FDs and LIC Housing Finance FD Schemes.

Which is the Best Investment Option for you?


You might be wondering which is the best investment option that is suitable to you. You should pick-up investment option based on your risk appetite and tenure of investment. If you want to save tax and have lower lock-in period, investing in ELSS funds could be better idea than PPF. If you want to accumulate gold over a period of 5-10 years and earn some interest out of it, Sovereign gold bonds could be a nice idea.

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FAQs on Best Investment Options in India


1) Which is the best investment plan in India for middle class?

Middle class person earnings could be on lower side. In such case small investments every month can help to grow their money. In such case investing in mutual funds through SIP could be good idea.

2) What is the best investment for 1 year?

While there are several investment options for a 1 year tenure, investing in short term mutual funds or bank FDs could fetch stable returns.

3) Which is the safest investment in India?

Investing in Nationalized Bank FD Schemes and post office small saving schemes are the safest investments in India.

4) Which investments have the best returns?

This would depend on the risk appetite and tenure. As an example, among tax saving investments, ELSS funds provide the best returns. However, it has lock-in period of 3 years and investment in mutual funds are high risk.

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Suresh KP

Best Investment Options in India for 2020

15 comments

  • Senthil

    Dear Suresh,
    How are you doing? Thank you for your wonderful investment suggestions.
    Kindly review, I would like to get your suggestion about my LIC policy plan advice: My LIC Plan is: New Jana Raksha Plan (Plan-91)
    i did almost paid last 10years now the people says bad reputation about LIC, shall i surrender and get out from this LIC plan?
    or shall i continue to complete the rest of the years? please expecting your advise!

    LIC plan started date: 2010
    Ending: 2026

    Thank you
    Senthil Selvam

  • NARESH

    Nice information. I want to invest lumsump amount of 5 lacs for the period of 5 years. what shall be the best option. Even if is combination of some investment options i am ok with it.

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