13 Popular Long-Term Investment Plans for Higher Returns

Eager to secure your financial future? Explore the best long-term investment plans for stellar returns!
OPEN FD
Long-Term Investments
OPEN FD
4 mins
12 December 2024

Investing in long-term schemes, which require you to invest for at least 5 years, offers many benefits. Not only do they allow you to compound dividends and multiply your gains. They also give you leeway to judge the market and make a sound financial plan that will last you through the years. Long-term investments also give you scope to make mistakes and correct them without suffering a crippling financial loss. Long-term investment schemes are also great for people who want to make investments that are low-involvement. Short-term investments need to be monitored closely, almost daily, while long-term investments do not require this kind of attention.

As per the Department of revenue, investments that are listed as stocks or mutual funds are long-term if the tenure is more than a year. For any other kind of investment, this period is three years. However, generally, people consider the best short-term investment options in India for those who are retired or considering retirement five years as a long-term investment.

Also read: Smart investments

Pro tip

Bajaj Finance launches a new variant, "FD Max", for investments upto Rs. 25,000 . Bajaj Finance is providing one of the highest interest rates of up to 8.85% p.a.for senior citizens and 8.60% p.a. for non-senior citizens , in this variant.

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Various long-term investment plans with high returns in India

Gold

While gold does not offer monthly dividends, what it does help you do is preserve your wealth. This may be for yourself or generations after you. Given how inflation is constantly on the rise, investing in gold is an excellent long-term investment option. While the currency's value may be on a downward slope, if you invest it in gold now, you can benefit from its increase in value over time. If you are a beginner to investments, this can make for a good start.

Public Provident Funds (PPFs)

It may seem like PPFs are not a great investment option, especially since the interest rate has been reduced to 7.10%. But, since the income accrued from it is tax-free, it remains a great long-term investment option. This is because while other investment options may offer a higher rate of interest, the post-tax amount you receive is likely to be much lesser than that offered by your PPF. If you are looking to build a financial cushion for yourself at retirement, PPFs are a sound investment option.

Mutual funds

Investing in mutual funds is excellent if you are in it for the long run, especially equity mutual fund schemes. You can invest as little as Rs. 1,000 and diversify your investment portfolio. This helps significantly reduce your risk. If you are looking at mutual funds as a long-term investment, it is essential to ensure that you pick a good mutual fund.

Think of it this way, even if a great author pens a few poorly written essays, on the whole, he will be viewed as an excellent wordsmith. Picking a good mutual fund works similarly. There may be some lean periods that are beyond your control, but on the whole, you will reap gains at the end of the long-term.

Stocks

There is no denying that investing in stocks is a good investment option. However, examine data on stocks, and you will find that if you invest in them for the short run, the chances of you making a loss are higher. But, if you hold on to stocks for a long period of time, it will help you make a neat profit at the end of the period. This is because the gains overshadow the odd loss.

Fixed deposits

Fixed deposits are a favorable long-term investment option for many because of their security. Since an FD is not dependent on market fluctuations, it offers assured returns. While fixed deposits are of two types—bank FD and company FD—the latter offers a much higher rate of interest. Other major benefits of company FDs are that they are tax-free if the income accrued from them is less than Rs. 5,000 per year. They also offer more flexibility with regard to tenure. To calculate the gains you can accrue from this long-term investment, you can use Bajaj Finance FD return calculator.

Fixed deposit variants

Highest Credit Ratings | Trusted with over 1.4 million Deposits | Assured Returns on FD
New Product

FD Max

INTEREST RATES UP TO
8.85% p.a.
Invest Online

Digital FD Only on App/Web

INTEREST RATES UP TO
8.85% p.a.
Invest Online

42 months

INTEREST RATES UP TO
8.85% p.a.
Open FD

FD - Age below 60

INTEREST RATES UP TO
8.60% p.a.
Open FD

FD - Senior Citizen

INTEREST RATES UP TO
8.85% p.a.
Open FD

FD – Special Tenure

INTEREST RATES UP TO
8.85% p.a.
Open FD

Real estate

Usually, the value of real estate is always on the rise. This is why it is considered to be a good long-term investment. Not only can you lease it out and boost your monthly income, if you develop the property, you can sell it for a much higher price rather quickly. Additionally, if you purchase affordable real estate in areas that are sure to be developed, say near an upcoming airport, the value of your property will spike in due course of time.

Bonds

When viewing bonds as a long-term investment option, you must pay close attention to the duration. Needless to say, short-term bonds are extremely volatile and pose a greater risk, so a duration of around 10 years is ideal. It will secure greater returns while safeguarding you from risky market fluctuations.

Additionally, when you invest in bonds, you are investing in debt instead of equity. The latter is what you invest in when you choose stocks. So if the company goes bankrupt, bond owners or debt holders will be given priority over stockholders.

National Pension System (NPS)

The National Pension System (NPS) is a government-backed retirement savings scheme that provides an excellent opportunity for long-term wealth creation. It offers a mix of equity (Tier I) and debt (Tier II) investment options, allowing you to choose the allocation that suits your risk tolerance. Contributions to NPS are eligible for tax deductions under Section 80C and 80CCD, making it a tax-efficient way to save for retirement.

Unit-Linked Insurance Plans (ULIPs)

ULIPs are insurance-cum-investment products that offer both life cover and investment opportunities. In India, ULIPs provide a wide range of fund options, including equity, debt, and balanced funds. They offer the potential for high returns over the long term. Additionally, ULIPs provide tax benefits for maturity proceeds, making them attractive for those seeking insurance coverage alongside wealth creation.

National Savings Certificates (NSC)

National Savings Certificates are a government-backed fixed-income investment option with a fixed maturity period. They provide a guaranteed return and are considered low-risk investments. NSCs offer competitive interest rates and are eligible for tax benefits under Section 80C. They are an ideal choice for conservative investors looking for long-term savings.

Post Office Time Deposit

Post Office Time Deposits are fixed-term savings accounts offered by India Post. They provide fixed interest rates and flexibility in choosing the tenure. Post Office Time Deposits come with government backing, ensuring the safety of your principal amount. They are suitable for long-term goals and offer different maturity periods to align with your investment horizon.

Debt Funds for Medium Term

Debt mutual funds are a suitable option for medium-term investment goals. They primarily invest in fixed-income securities like bonds and offer stable returns with lower volatility compared to equities. Debt funds come in various categories, such as short-term, medium-term, and long-term, allowing you to select one that matches your investment horizon.

Hybrid Funds

Hybrid funds, also known as balanced funds, offer a balanced mix of equity and debt investments. They are suitable for long-term investors seeking a balanced approach to risk and returns. Hybrid funds provide diversification across asset classes and are managed by professional fund managers to optimize returns over time.

Explore Life Insurance policies

Among other investment options, certain life insurance policies are a unique combination of savings, investment, and life cover, offering investment options beyond traditional methods. These life insurance policies can help you achieve long-term goals by offering financial security to you and your loved ones. Bajaj Finance Insurance Mall brings you life insurance plans with coverage up to Rs. 1 crore at budget-friendly premiums, offered by leading insurance providers. This all-in-one platform simplifies the process of comparing and purchasing the right insurance policy online to help you secure your financial well-being and that of your loved ones. 

In conclusion, the Indian financial market offers a range of investment options to cater to various long-term financial goals. When considering these investment ideas, it's essential to assess your risk tolerance, investment horizon, and financial objectives. Diversifying your portfolio across these options can help you achieve higher returns while minimizing risk. Consulting with a financial advisor can assist you in creating a personalized investment strategy aligned with your long-term goals.

Calculate your expected investment returns with the help of our investment calculators

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Frequently asked questions

What are the best investment plans for 1 year?

For a short investment horizon of 1 year, it's advisable to focus on low-risk, liquid investment options due to the limited time frame. Consider investing in Fixed Deposits (FDs) with shorter tenures, liquid funds, or ultra-short-term debt mutual funds. These options offer relatively stable returns and high liquidity, allowing you to access your funds quickly if needed.

What are the best investment plans for 3 years?

A 3-year investment horizon allows for slightly more flexibility. Consider options like Fixed Deposits, Recurring Deposits (RDs), debt mutual funds, or short-term debt funds. These investments provide a balance between safety and potential returns over a 3-year period. Equity investments are an option if you can tolerate higher volatility and are willing to stay invested for the long term.

What are the best investment plans for 5 years?

With a 5-year investment horizon, you can explore a broader range of investment options. Consider diversified equity mutual funds for the potential of higher returns. Public Provident Fund (PPF) and National Savings Certificate (NSC) are also viable choices, offering tax benefits and stable returns over a 5-year period. Fixed Deposits, both traditional and tax-saving FDs, are suitable for conservative investors.

Where should I Invest my money for a good return?

To achieve good returns on your investments, diversification is key. In the Indian financial market, consider a mix of the following: Equity Mutual Funds, Debt Mutual Funds, Public Provident Fund (PPF), National Pension System (NPS), Unit-Linked Insurance Plans (ULIPs), Stock Market.

How can I save money from my salary?

Saving money from your salary involves creating a budget, prioritizing savings, and practicing discipline. Follow these steps:

  1. Create a Budget: Track your income and expenses to understand where your money goes.
  2. Set Savings Goals: Determine how much you want to save each month.
  3. Automate Savings: Set up automatic transfers to a separate savings account.
  4. Cut Unnecessary Expenses: Identify areas where you can reduce discretionary spending.
  5. Emergency Fund: Build an emergency fund to cover unexpected expenses.
  6. Invest Wisely: Invest your savings in suitable investment options to grow your wealth over time.
  7. Review and Adjust: Regularly review your budget and savings plan to make necessary adjustments.
What is the Digital FD offered by Bajaj Finance?

Bajaj Finance has launched a new FD type called "Bajaj Finance Digital FD" for a period of 42 months. Bajaj Finance is providing one of the highest interest rates of up to 8.85% p.a. for senior citizens and for the customers below the age of 60 they are providing up to 8.60% p.a. The Digital FD can be booked and managed only through the Bajaj Finserv website or app.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.