Best Investment Options in India in 2024

Investing is the backbone of creating a financially secure life. From accumulating wealth for the future to fulfilling your short-, medium-, and long-term goals, investing plays a key part in all of it. As an investor in India, you can choose from plenty of investment options to find your ideal match. This article highlights some of the best investment options in India that can help you build a stable financial future. We have categorised these investment avenues on the basis of the allied risk exposure to help streamline the selection process.

• Low-risk investors seeking capital protection and guaranteed returns can choose from FD, PPF, and T-bills.
• Debt funds, hybrid funds, and ETFs are good investment options for medium-risk investors.
• Direct equity, equity mutual funds, and forex trading are some of the best investment options in India for high-risk investors seeking high returns.

If you are a low-risk investor seeking reliable returns with little to no volatility risks, you can choose from the following best investment options in India:
 

Fixed deposit
 

Hailed as one of the best investment options, FDs are one of the safest forms of investment in India. You can invest a lump-sum corpus in FDs for flexible tenures ranging from 7 days to 10 years. During the investment tenure, you can earn interest at a fixed rate of around 6%-10% p.a. The capital deposited in bank FDs is protected by a DICGC cover of up to Rs. 5 Lakhs, while the interest rate is fixed and remains unaffected by market fluctuations. You can consider investing Bajaj Finance Fixed Deposit. With a top-tier AAA rating from financial agencies like CRISIL and ICRA, they offer one of the highest returns, up to 8.85% p.a.
 

PPF
 

PPF, or Public Provident Fund, is one of the best investment options in India for those seeking safe retirement planning plans. This government-back long-term savings scheme offers risk-free returns at a rate fixed by the Central Government that’s revised quarterly. It comes with a 15-year-long tenure, offering ample time for your investment to grow and compound.

Treasury bills

Treasury bills or T-bills are money market instruments issued by the Indian Government to raise funds. These short-term debt instruments are issued in three tenure options, namely, 91 days, 182 days, and 364 days. Since T-bills are government-backed, the chances of default are almost absent. However, in India, T-bills are zero-coupon securities, which means the government does not pay any interest on the capital. Rather, you can redeem the bill at face value on maturity. 

If you are a medium-risk investor, you lie somewhere in between low and high-risk investors. Simply put, you are willing to take on more risk than low-risk investors but prefer to avoid the excessive risks taken by high-risk investors. If you fit this risk profile, here are some of the best investment options in India you can consider:

Debt funds

Debt funds are mutual funds that invest in fixed-income securities like bonds and T-bills. These mutual funds offer decent returns ranging from 7%-9% and are also considered safer than equity MFs. However, debt funds carry a certain degree of credit risk and are susceptible to interest rate risks that can impact the prices of underlying securities.

Balanced funds
 

If you’re looking for the best investment option in India that gives you relative capital safety but also better-than-FD returns, you can consider balanced funds. Balanced funds are a type of hybrid mutual fund category that invests its pooled capital in both equities and debt instruments. Equities offer higher return potential, while debt investments help stability returns and protect yields from sudden market fluctuations.

ETFs
 

ETFs or Exchange Traded Funds are instruments that invest in a security basket of equities and bonds to track the performance of a market index. Passively managed ETFs are good investment options for those seeking moderately high returns without excessive investment costs. ETFs trade on the stock exchange and remain some of the best investment options in India for those who wish to invest in the stock market but lack expertise.

If you identify as a high-risk investor, you may prefer investments that offer high returns against equally high risk. Here, the returns are not assured. In fact, even the invested capital is subject to the possibility of loss. As a high-risk investor, you can consider the following top investment options:
 

Direct equities
 

Investing directly in equities means purchasing shares of company stocks issued on stock exchanges like BSE and NSE. If done right, equity investments can offer exponential returns. However, direct equity investments demand a solid understanding of the market and expertise in stock selection. Additionally, equities are prone to market volatility, presenting a higher risk for investors.

Equity mutual funds
 

High-risk investors lacking market knowledge can invest in equities through professionally managed equity mutual funds. These MF schemes invest at least 65% of their capital in equity and equity-related assets to offer investors a high return potential. Among equity funds, you can broadly choose from small-cap, mid-cap, and large-cap funds. Each category presents a different risk-return profile, with small-cap funds being the most volatile while large-cap funds offer the greatest stability.

Forex trading

Forex trading is yet another prudent investment option for high-risk investors seeking exceptionally high returns on their investments. It involves the buying and selling of currency in the global marketplace to benefit from exchange rate fluctuations. Essentially, traders speculate on currency price movements to lock gains in forex trading. Like direct equity investments, forex trading also requires considerable market knowledge and expertise.

In summation, if you’re looking for some of the best investment options in India, you can easily choose one/many from this comprehensive list based on your risk tolerance capacity. Moreover, you should also note that risk and return are interlinked. Therefore, if you opt for a low-risk investment option, you must also be prepared for low returns. Consider these variables carefully before selecting from the list of the best investment options in India.