In the quest for financial security and wealth accumulation, choosing the right long term investment plans is paramount. India offers a diverse range of investment options that cater to the needs of those who seek to grow their wealth steadily over an extended period. Whether you’re planning for retirement, your child’s education, or simply looking to build a financial cushion for the future, understanding the best long term investment plans in India is essential.
In this guide, we will explore some of the top investment avenues that can help you achieve your long term financial goals while navigating the intricacies of the Indian investment landscape.
However, if you are seeking the best short term investment plans with high returns in India, especially in the realm of fixed income, consider exploring the real estate market. One particularly enticing option within this domain is structured debt investments, with a specific focus on the commercial real estate sector.
These structured debt investments in real estate entail customized financing solutions tailored to suit commercial real estate projects. They present investors with the prospect of potentially securing attractive returns and regular income streams. What’s notable is that entry into this investment avenue is accessible with a relatively modest initial investment of 10 lakhs, and it holds the potential to yield returns ranging from 12 to 20%. These investment opportunities are made available through well-established alternative investment platforms like Assetmonk.
What are long term Investments?
Long term investments are financial assets that individuals or organizations acquire with the intention of holding them for an extended period, typically several years or even decades. The primary objective of long term investments is to build wealth, generate income, or achieve specific financial goals over time. In fact, there are several long term investment options in India.
Why Opt for Long term Investments?
In contrast to short term investment strategies aimed at capital preservation, long term investments are designed to foster wealth creation. They involve constructing an investment portfolio that generates income over an extended period, serving purposes such as retirement planning or achieving long term financial objectives. Accumulating wealth becomes crucial to ensure a comfortable future, sustaining the income levels required.
Nevertheless, long term investments entail a degree of risk, often encompassing equity investments, ULIPs, and similar options. While riskier, these investments offer an opportunity to recover from market fluctuations over the extended holding period. While they may experience downturns of up to 20% in the short term, they can potentially yield double-digit returns over a 10 to 20-year horizon. On the other hand, assets with lower risk provide more predictable but slower returns.
Hence, when contemplating long term goals, it’s essential to weather short term fluctuations for the sake of achieving desired returns.
Common long term Investment Plans Financial Objectives
Investing for the long term serves various purposes, including:
- Funding Children’s Marriages
- Financing Higher Education for Children
- Purchasing Property or Land
- Planning for Retirement
One significant advantage of long term investment plans is that they enable you to cover future expenses with accumulated funds, often with tax-saving benefits. However, in some cases, returns may become taxable beyond a certain threshold. Additionally, if you resort to loans to meet long term goals, you may incur interest charges typically ranging from 8 to 10%.
Curious about the best long term investment plans for 2023 or the best long term investment options? Below, we highlight some top choices:
Top long term Investment Plans for 2023
- Public Provident Fund (PPF)
The Public Provident Fund (PPF) stands as a top-tier option among long term investment schemes, offering government-backed assurance. PPF emerges as a premier choice for individuals seeking secure, government-guaranteed, long term investment opportunities. Here are the key details:
- Investment Duration: 15 years
- Minimum Investment Amount: ₹500
- Maximum Annual Investment Limit: ₹1.5 lakh
- Typical Returns: Historically, PPF yields an average return of 7% to 8%.
- Risk Profile: PPF carries a low level of risk.
- Taxation Status: PPF enjoys tax-free status, falling under the EEE (Exempt, Exempt, Exempt) category.
- Tax Advantages: Investors can avail of tax deductions under Section 80C.
- Employee Provident Fund (EPF)
The Employee Provident Fund (EPF) stands as a prime choice for retirement savings, with a portion of your earnings directed into a provident fund that accumulates interest over an extended period. Here are the key details:
- Investment Duration: Extended, suitable for long term retirement planning.
- Minimum Investment Contribution: 12% of Your Salary
- Maximum Annual Investment Limit: ₹2.5 lakh
- Typical Returns: Historically, EPF has delivered average returns ranging from 8.5% to 9.5%.
- Risk Profile: EPF is associated with a low level of risk.
- Taxation Status: Withdrawals from EPF are subject to taxation.
- Tax Advantages: EPF offers tax deductions under Section 80C, and the interest earned is exempt from taxation.
- Mutual Funds
Mutual funds emerged as top-tier long term investment plans with high returns within the Indian landscape, bringing together investments from a multitude of individuals to construct a diversified portfolio encompassing bonds, equities, and a range of other securities.
Here are the salient details:
- Investment Duration: Typically spans 3 to 5 years, although it varies by fund.
- Minimum Investment Amount: Variable, contingent on the specific fund.
- Maximum Investment Limit: No rigid upper threshold.
- Typical Returns: Averages between 5% and 15%, subject to variation depending on the fund type and prevailing market conditions.
- Risk Profile: Ranging from moderate to high.
- Taxation Status: Capital gains from mutual funds are subject to taxation.
- Tax Advantages: Equity-linked Savings Scheme (ELSS) extends tax deductions under Section 80C, offering potential tax benefits.
- Fixed Deposits
Investing in fixed deposits through banks presents itself as a sound investment strategy, recognized for its reliability and attractive returns within the Indian context.
Here are the key features:
- Investment Duration: Ranges from as short as 7 days to as long as 10 years.
- Minimum Investment Amount: A minimum deposit of Rs. 1000 is typically required.
- Maximum Investment Limit: There is no rigid upper limit for investment.
- Typical Returns: Historically, fixed deposits have yielded an average return of approximately 3% to 6%.
- Risk Profile: Fixed deposits are associated with a low level of risk.
- Taxation Status: Interest earned on fixed deposits is subject to taxation.
- Tax Benefits: Fixed deposits do not typically offer specific tax benefits.
- ULIPs (Unit Linked Insurance Plans)
Unit Linked Insurance Plans (ULIPs) are also another long term investment plan with high returns. It represents another compelling investment option within the Indian financial landscape. ULIPs seamlessly integrate insurance and investment, offering both life coverage and attractive investment prospects. They are tailored for long term wealth growth.
Here are the salient attributes:
- Investment Duration: Typically spans 5 years, catering to long term financial objectives.
- Minimum Investment Amount: Commences at Rs 1,500.
- Maximum Investment Limit: No rigid upper investment limit exists.
- Typical Returns: Historically, ULIPs have demonstrated an average return of around 12%.
- Risk Profile: ULIPs are associated with a moderate to high-risk level.
- Taxation Status: ULIPs become tax-free (EEE – Exempt, Exempt, Exempt) after 5 years.
- Tax Advantages: Investors may avail of tax deductions under Section 80C, adding to their appeal.
- National Pension Scheme (NPS)
The National Pension System (NPS) stands as an attractive long term investment plan or one of the best long term investment opportunities for generating substantial returns. This voluntary pension scheme assists individuals in building a retirement nest egg by offering market-linked returns and associated tax advantages.
Here are the pertinent details:
- Investment Duration: Tailored for long term retirement planning.
- Minimum Investment Amount: Commences at ₹500.
- Maximum Investment Limit: No defined upper investment boundary.
- Typical Returns: Historically, NPS has delivered an average return of approximately 8% to 10%.
- Risk Profile: NPS is associated with a moderate level of risk.
- Taxation Status: Withdrawals from NPS are subject to taxation.
- Tax Advantages: NPS offers additional tax deductions under Section 80CCD(1B), enhancing its appeal as an investment choice.
Directly investing in the stocks of publicly traded companies presents an opportunity for potential growth in capital value alongside the prospect of receiving dividend income. It is one of the best long term investment opportunities.
Here are the key features:
- Investment Duration: The duration can vary based on individual preferences and goals.
- Minimum Investment Amount: The minimum investment amount can differ depending on the specific stock or company.
- Maximum Investment Limit: There is no prescribed upper investment boundary.
- Typical Returns: Historically, returns from stock investments have ranged from approximately 7% to 12%.
- Risk Profile: Investing in stocks is associated with a high level of risk due to market volatility.
- Taxation Status: Capital gains from stock investments are typically subject to taxation.
- Tax Benefits: long term capital gains on equity investments are often eligible for exemption up to a specific limit, providing potential tax advantages.
- Real Estate
Real estate is one of the best long term investment plans with high returns. Investing in real estate emerges as a premier choice among long term investment strategies, promising substantial returns and ranking as one of the most lucrative investment plans. Dabbling in residential, commercial, or rental properties offers the potential for capital appreciation and a steady rental income stream.
Real estate constitutes a top-tier option for sustained, long term investments, with returns that tend to grow over time.
Here are the vital attributes:
- Investment Duration: Tailored for the long haul, with the potential to extend indefinitely.
- Minimum Investment Amount: Entry into real estate investment typically requires a substantial initial investment.
- Maximum Investment Limit: No rigid constraints governing the upper limit of investment.
- Typical Returns: Real estate investments have historically yielded an average return of around 10%.
- Risk Profile: Real estate investments carry a risk profile ranging from moderate to high, often contingent on market conditions.
- Taxation Status: Capital gains realized from real estate transactions are generally subject to taxation.
- Tax Benefits: long term capital gains on real estate investments may qualify for indexation benefits, which can be advantageous from a tax perspective.
Investing in gold ranks among India’s top-performing long term investment plans, known for its potential for robust returns. Allocating funds into gold or other valuable metals serves as a safeguard against the eroding effects of inflation and the uncertainties of the financial market.
Here are the essential attributes:
- Investment Duration: The investment horizon for gold can vary according to individual preferences and market conditions.
- Minimum Investment Amount: The minimum investment requirement can fluctuate, contingent upon the form of gold investment chosen.
- Maximum Investment Limit: There exists no specific upper investment threshold when investing in gold.
- Typical Returns: Returns from gold investments fluctuate in tandem with gold prices, making them variable.
- Risk Profile: Gold investments carry a risk profile ranging from low to moderate, depending on market dynamics.
- Taxation Status: Capital gains realized from gold investments are typically subject to taxation.
- Tax Benefits: The Gold Monetization Scheme extends the potential for tax benefits on interest earned, enhancing its attractiveness as an investment option.
- Equity Funds
Equity funds in India stand out as one of the premier long term investment options or the best long term investment in India. These funds pool money from investors and invest in a diversified portfolio of stocks. With a recommended investment horizon of five years or more, equity funds offer the potential for substantial capital appreciation over time. They are known for their ability to outpace inflation and deliver attractive returns, making them an ideal choice for individuals looking to build wealth over the long haul.
- Investment Duration: 5 years or more
- Minimum Investment Amount: Rs. 500
- Maximum Investment Limit: No limit
- Typical Returns: 12-15%
- Risk Profile: High
- Taxation Status: Taxable on Capital Gains Tax
- Tax Benefits: According to Section 10(D), the maximum allowable investment is limited to Rs 1.5 lakhs.
Best long term Investment Plans in India
Which is the best long term investment in India or long term investment opportunities? Where should I invest my money? The following are some of the best ways to invest money in India.
|Investment Option||Risk Level||Potential Returns||Liquidity||Suitable for|
|Fixed Deposits (FDs)||Low||4%-8%||Varies depending on the terms||Conservative investors looking for capital preservation and regular income|
|Public Provident Fund (PPF)||Low to Moderate||7.1%||Low (lock-in period of 15 years)||Individuals seeking tax-efficient, long term investments|
|ULIPs||Medium to High||12 percent||Moderate (5 years)||Individuals looking for insurance coverage along with investment opportunities.|
|Mutual Funds||Varies (based on fund type)||6%-9%||Moderate to High (depending on fund type)||Investors seeking professional management and potential for higher returns|
|National Pension System (NPS)||Moderate||8%-10%||Low to Medium (withdrawal restrictions apply)||Individuals planning for long term retirement|
|Stocks||High||6.6%||High (can be bought and sold on stock exchanges)||Investors with a higher risk appetite and a long term investment horizon|
|Equity Funds||High||5 to 15 percent||Moderate to high||Investors seeking long term capital appreciation are willing to tolerate moderate to high risk.|
|Real Estate||Moderate to high||10 percent||Moderate to high||Best for individuals seeking passive income|
|Gold||Moderate||12%||Moderate (depending on form of investment)||Individuals seeking a hedge against inflation and currency fluctuations|
You have the option to allocate your funds to any of the previously mentioned best long term investment plans or schemes to facilitate long term wealth accumulation. However, before embarking on your investment journey, it is crucial to seek guidance from a financial advisor who can assist you in managing your financial portfolio effectively. You can explore online resources, analyze market data, review historical performance, and even delve into the experiences of fellow investors to arrive at well-informed investment decisions. This approach will empower you to make prudent investments that align with your predefined financial objectives and pave the way for achieving them.
Assetmonk distinguishes itself as an outstanding alternative investment platform in India, presenting a diverse range of appealing options for astute investors. Within these opportunities, individuals can delve into the domain of structured debt investments within the commercial real estate sector and a carefully curated assortment of alternative investment selections. Assetmonk offers exclusive and customized investment possibilities to its esteemed clientele, with a minimum investment requirement of 10 lakhs and a guaranteed Internal Rate of Return (IRR) of 17 percent.
- Best Short Term Investments With Higher Returns.
- Structured Debt Backed by Real Estate vs. Debt Mutual Funds: Exploring Risk and Yield Potential
- 18 Best Investment Options in India to get Higher Returns 2023
Q1. What are long term investments?
A. long term investments are financial assets that individuals or organizations acquire with the intention of holding them for an extended period, typically several years or even decades. The primary objective of long term investments is to build wealth, generate income, or achieve specific financial goals over time.
Q2. What are some of the best long term investment plans in India?
A. Some of the best long term investment plans in India are real estate, gold, EPF, PPF, and NPS.
Q3. What should I invest in for long term gain?
A. You can invest in ULIPs, stocks, real estate, PPF, and EPF for long term gains.
Q4. What makes a good long term investment?
A. A good long term investment typically possesses several key attributes. It should offer the potential for capital appreciation over time, be aligned with one’s financial goals, and provide diversification to spread risk. Additionally, a good long term investment often offers some form of income generation and demonstrates resilience in the face of market fluctuations.