Investment Alternatives Available in India
Here are some most important investment alternatives available in India:
1. Gold: India is highest consumer of gold in world as it is best investment in India. Investment in gold can be in the form of jewellery, gold coins and bars, gold ETF, gold mutual funds.
2. Mutual Fund: Mutual fund is a fund created with poor of investments from many investors. It is the best way to diversify portfolio. There are plenty of mutual fund schemes available like debt funds, foreign equity, gold funds, equity funds and mixed funds.
3. Government Securities (Bonds): These are issued by central or state government. It is the safest investment instrument. No tax is deducted at source and can be held in demat form. These are issued and redeemed at face value.
4. Fixed Deposits: Fixed deposits can be bank fixed deposits or corporate fixed deposits. Corporate fixed deposits are issued by corporations. These are more riskier than bank fixed deposits as most corporate deposits are unsecured and so offer higher rate of interest.
5.Real Estate: Considered as the best form of investment but only after gold. Investing in metros is very expensive, so it is advisable to invest in outskirts.
6. Debentures/Bonds: These are bit riskier than government bonds. Due to high risk return offered is also higher than government bonds.
7. Public Provident Fund: This investment enjoys the benefit under section 80C of Income Tax Act. Minimum investment can be of Rs 500 and maximum can be Rs 1,00,000 per fiscal year.Lock in tenure of public provident fund is 15 years.
8. National Pension Scheme: This instrument is used for retirement planning.
9. Venture Capital/Angle Investing: Investing in someones business idea at an early stage of venture. One can exit the investment when business is acquired by some other company or when company gets listed. These carry huge risk and are highly illiquid. This type of investment is not advisable for small investors.
Some other investment alternatives are SIP (Systematic Investment Plan), equity and Term Plans.