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Long term investments are a way to so many dreams and goals. So whether you are planning for a child’s school or marriage, long-term investments are the way to go. You can start investing and getting proper returns to achieve long term plans.
The recent COVID-19 outbreak has taught everyone a few important truths about investing. Vinay Kumar, a 34-year-old media professional, was laid off during the COVID-19 crisis because his employer needed to cut costs. The news hit him like a disaster and he was really upset with three thoughts: finding a job, taking care of family and repaying loans. He began working at 25 and started investing in several funds. So without wasting any more time, he redeemed his investments and used his returns to feed his family, pay EMI, and learn new skills. Sooner, he got a job and things came back on track. Long-term investments that he began 25 years ago are now paying off, demonstrating the value of long-term investments.
Long-term investments are those that are made over a period of more than five years. It also means you won’t need those dollars until you really need them. In this article, we are going to discuss some best paying long term investment options.
List of 10 Best Long Term Investment Opportunities in 2021
Here are the highest return long term investment options that Indians might consider as they save for their future goals:
Depending on the type of goal, time frame, and risk tolerance, one can select one of the best long-term investment plans from the list above and begin saving. Let’s take a closer look at each investment plan and its features:-
- Real Estate
Investing in a booming sector like real estate is one of the best long-term investments that require a lot of money upfront but guarantees tremendous returns if kept for a longer period of time. Plots, houses, farmhouses, commercials, hotels, restaurants, and other properties can be purchased.
Investing in real estate has numerous advantages over stocks, bonds, and mutual funds. Real estate provides consistent cash flow, increases in value in line with inflation, yields a greater return due to positive leverage and allows for equity expansion through debt reduction.
When faced with uncertainty, real estate is a “less volatile” investment. Investing in real estate may be less dangerous at this time, as the economy struggles to recover from the Covid-19 pandemic. And this might be a tactic used by investors looking for safer assets in the market.
- Bank Fixed Deposit (FD)
When there were few options in India, this was the most conventional kind of investment. Predetermined deposits given by banks are the safest, as the money can be invested for longer periods of time, such as three, five, or even 10 years, with a fixed rate of return ranging from 3% to 6.5 percent each year. It is possible to withdraw it once the period has ended. The interest rates are higher than savings accounts and RDs, and early withdrawal is possible, however there is a penalty.
- Post Office Savings Schemes
Post offices, like banks, provide a variety of savings plans, which are more popular due to their security and higher interest rates. The post office savings account, post office monthly income scheme account, 5-year senior citizen savings plan, National savings certificate, Kisan Vikas Patra, Sukanya Samriddhi Yojana, and others are some of the most well-known post office savings programmes.
- Public Provident Fund (PPF)
This is comparable to the Employee Provident Fund (EPF) offered to paid employees, with the exception that anybody can register a PPF account. PPF investments can be kept for up to 15 years, with a current rate of return of 7.1 percent set by the government each year. The most significant benefit of investing in a PPF programme is that it qualifies for a tax deduction under section 80C.
- National Savings Certificates (NSC)
Another safe long-term investment option in India is accessible through the post office and a few public sector banks. The investment period is five years, and one can begin saving in NSC with as little as $100, making it a viable choice for persons in the unorganised sector to begin saving. The present interest rate is 6.8% each year, and the Indian government, like the PPF, sets the rates every year.
- Corporate Fixed Deposits
Corporates collect these deposits to fund expansion and operating activities. Though it is similar to bank FDs, the risk is higher in comparison to other options, but the interest rates are slightly higher. They offer an annual interest rate of 6 to 8%.
- Sukanya Samriddhi Account (SSA)
This is an investment scheme set up by the Indian government for the benefit of females. A minimum of $1,000 can be deposited in a single financial year, with deposits allowed until the girl reaches the age of 14. From the date of account opening, the account matures when she reaches the age of 21. The quoted interest rate is 7.6%, and it qualifies for a tax deduction under section 80C.
- Unit Linked Insurance Plan (ULIP)
If you’re seeking a long-term investment solution that combines insurance with investing, you’ve come to the right place. Then a ULIP may be your best option, as one component of the premium you pay is used to secure your life, while the other is invested in stock markets to generate returns. Returns are likely to be around 8%, but because it invests in equities, prices are likely to fluctuate. Their premiums and administrative costs are likewise high due to the same reason.
- National Pension System (NPS)
It is a long-term investment option developed by the Indian government to provide monthly income to investors when they retire. A person can continue to invest in this programme until they reach the age of 60, after which they must use at least 40% of their funds to acquire a regular income annuity plan. The remaining 60% can be taken out as a lump sum payment.
- Stocks and Mutual Funds
Stocks are the ideal location to invest if you want to earn high returns over a long period of time. You can invest directly in long-term investment stocks or in mutual funds through a systematic investment plan (SIP). In any case, you should expect 12 to 16 percent returns, with 20 or 30 percent returns possible if the economy is performing well. Large-cap and mid-cap funds with a proven track record of providing exceptional returns are some of the best mutual funds for long-term investment.
Summary
Investment Plan | Average Return | Risk (Low, High, Moderate) |
| 10 % in 10 year | Low |
| 4.75% to 6.50% for 3 year | Low |
| 5.5% for 3 year and 6.7% for 5 year | Low |
| 7% to 8% per annum | Low |
| 6.8% per annum | Low |
| 5% to 7% per annum | Low |
| 8.5% per annum | Low |
| 10% to 12% per annum | Moderate |
| 9% -12% per annum | Low |
| 16 – 20 % per year | Moderate |
Conclusion
One of the most effective strategies to accumulate wealth over time is long term investing. However, learning to think long term and avoiding excessively market watches is the first step.
If you’re looking for long-term investment opportunities, the above possibilities are worth considering. However, you should carefully review and analyse each investment plan before deciding.
Assetmonk provides thoroughly examined assets that are tailored to match the goals of various clients. Our goal-oriented products are designed to cater to a wide range of investors with varying objectives, such as capital appreciation, regular income, or risk diversification. To make the investment process as secure and safe as possible, our Real Estate Investment Plans go through rigorous due diligence and professional examining on one so that you get the most out of your decision. You can check our website to learn more about our solutions.
Best Long Term Investment Opportunities FAQ's:
The stock market has been regarded as the source of the highest historical returns for a long period of time. Higher returns are accompanied by a higher level of risk. The price of a stock is more variable than the price of a bond. Stocks are less trustworthy over shorter periods of time.
You might wish to put the majority of your money into extremely safe investments like high-yield savings accounts, CDs, and US Treasury bonds. If you want to improve your total returns, start with tiny investments in bonds, dividend-paying equities, REITs, real estate, or P2P lending.