What is the Best Way to Invest Money in India?

Have we ever asked ourselves the question – “Why do we save and not invest?” According to the experts, Indian’s cling to physical assets like land, house, or gold because it is an instinct. Did you know that India is a country of savers and not investors? Only 2% of the entire population participate in the equity market too. 

The truth is, those things might change soon. With early retirement, fast earning options, and mental and physical health importance, Indians have taken notice of the benefits that lie in investing and long-term investments for a better lifestyle. Everyone has come to the point where they feel like they do not live up to their potential, and if they want to, then investing is the right path to take. 

As the pandemic had struck, the disruption caused a lot of people to adapt to modern technology. The adaptation of modern technology even began to influence the investment factor of the country.

Though a lot of us save today, we interchange it and perceive it to be the process of investing. That is a misconception. 

Saving and investing are entirely two different attributes. Saving is the act of setting aside money that is not going to be spent for now but is safeguarded for an emergency or a future purpose. Investing is the operation of buying assets like stocks, bonds, mutual funds, and more with the expectation of making more money.

Now that Indians have also taken their big leap towards investing, it is best to gain insights on what are the best ways of investing in the country and what investment plan in India would work out for them.

Various Investment Options Available in India

Direct Equity 

Investing in stocks might not seem like everyone’s cup of tea as there is no guarantee of returns, and it is a volatile asset. Moreover, it is difficult to pick the right stock from the market. Along with picking the right stock also comes the responsibility of buying at the right prices, setting the right timings, and exiting at the fixed time. It is not easy. But equity has been delivering investors with a higher than usual return through inflation compared to all of the other asset classes.

Losing a considerable portion of your capital is a high probability in the market. You could diversify across industries and market capitalizations to mitigate risk to some degree. A Demat account is required to invest directly in equity.

Equity Mutual Funds 

Mutual funds that invest mostly in stocks are known as equity mutual funds. An equity mutual fund scheme to spend at least 65% of its funds in equity and equity-related instruments, according to existing Securities and Exchange Board of India (Sebi) Mutual Fund Regulations. An equity fund can be run aggressively or passively.

Returns on an actively traded fund are solely dependent on the ability of the fund manager to earn returns. Passively administered mutual funds and exchange-traded funds (ETFs) track the underlying index. Equity funds are classified based on their market capitalization or the industries in which they invest.

Debt Mutual Funds 

Debt mutual funds are the investment schemes for investors who want a steady return. They are stated to be the least risky, especially when compared to equity funds. They are fixed interest generating schemes.

The National Pension System 

Retirement plans are on everyone’s list, and the National Pension System is a long-term retirement that is focused on investment. It was launched by Pension Fund Regulatory and Development Authority, and it is a mix of equity, fixed, corporate bonds, liquid funds, and government funds.

The Public Provident Fund 

Many individuals use the Public Provident Fund as a source of income. Since the PPF has a 15-year term, the compounding of tax-free interest has a significant effect. Particularly in the later years. It is therefore a good investment since the interest gained and the principal invested is guaranteed by a sovereign guarantee. Remember that the government reviews the interest rate on PPF per year.

Fixed Bank Deposits 

In India, a bank fixed deposit is regarded as a better investment option than equity or mutual funds. From February 4, 2020, each depositor in a bank is covered up to a limit of Rs 5 lakh for both principal and interest under the deposit insurance and credit guarantee corporation (DICGC) law.

Savings Plan for Senior Citizens (SCSS) 

The Senior Citizens’ Saving Scheme, which is likely to be most retirees’ first preference, is a must-have in their savings portfolios. This system is only open to senior citizens or early retirees, as the name implies. Anyone over the age of 60 may apply for SCSS at a post office or a bank.

PMVVY (Pradhan Mantri Vaya Vandana Yojana) 

It is a government scheme that guarantees a 7.4% annual return to senior citizens aged 60 and up. The pension income may be paid weekly, quarterly, half-yearly, or yearly, depending on the preference. The minimum monthly pension is Rs 1,000 and the highest monthly pension is Rs 9,250. The plan allows for a gross investment of Rs15 lakh.

Real Estate 

The home you live in is for your use and can never be called an investment. The second property you purchase will be used as an investment if you do not wish to move there.

The precious metal gold 

Having gold in the form of jewellery comes with its own set of considerations, such as protection and expense. Then there are the making costs, which usually range from 6% to 14% of the gold price (and may go as high as 25% in the case of special designs). There is always time to purchase gold coins for those who are interested.


Investing in India draws more attention towards liquidity, diversification, expert management, flexibility, financial schemes, safety and transparency, and much more. Above are some of the most renowned investing methods of the country that even you can take advantage of.

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