Best Investment Plans With High Returns

The thumb rule of investing is that the financial products that carry a higher risk often give a higher return. If you are looking to multiply your wealth rapidly, you first need to assess your risk appetite and the market conditions. You also need to keep in that some assets that generate high returns might not be entirely liquid, which means it’ll be difficult for you to use those funds in case of an emergency.

In this article, we will explore the best investment plans with high returns for you to rapidly grow your wealth.

Key Takeaways

• High return investment plans most often come with a high risk.
• While the best investment plans with high returns may seem like extremely attractive options, it is always advised to maintain a well-balanced investment portfolio.
• Long-term investment plans often carry high return earning capabilities and are not liquid.

Words to Remember

1. ROI – Return on Investment – is a measure of how much profit your investment generates within a specific span of time.
2. Liquid asset – when an asset can be converted into cash immediately, it is called a liquid asset.

The best investment plans with high returns

The right investments can help you achieve your future financial goals and instill the concept of saving while growing your wealth. They are wonderful forms of passive income that every individual is encouraged to opt for.

To grow your wealth rapidly, here are some of the best investment plans with high returns.

Stocks

The share market is one of the most lucrative investment opportunities to make high returns on your investment. Companies list themselves on the stock exchange and offer parts of their company in the form of shares to the public. The stock market is usually extremely volatile to any latest news that may impact the industry. For example, if the government announced a subsidy for electric vehicles, all stocks of companies that engage in the business of making electric vehicles could potentially increase. At the same time, the prices of stocks of only fuel-based vehicle companies could decrease.

There are many ways in which investors can invest in stocks. Investing in financial instruments like index funds will generate considerable lower returns than investing directly in stocks because index funds give returns based on the average performance of a group of assets.

Learn the Basics

1. Most good stocks also give dividend benefits which is a distribution of the profits of the company.
2. Stocks have the potential to give high returns over a shorter period but carry a considerable amount of risk.
3. Stock trading is carried out from a demat account and trading account and is usually highly liquid.
4. Investing in stocks can be short-term or long-term

National Pension Scheme (NPS)

This is a government-backed investment product that locks up the funds until the investor reaches retirement age. The funds are collected from individuals and invested in bonds, stocks, government securities, and other options to create a diversified investment portfolio that generates high returns. This is one of the best investment plans with high returns if your objective is secure enough money for old age.

Learn the Basics

1. Since the lock-in period varies depending on your age and this product is meant to secure retirement, it is not a liquid asset.
2. The average returns from different kinds of NPS Schemes to date range from 7% to 13% from 1 to 5-year options.
3. The minimum contribution to an NPS account is Rs. 6,000 and cannot exceed 10% of your annual income. 
4. The tax benefit for returns from NPS is only up to Rs. 2 lakh per year.
5. If the maturity amount is more than Rs. 2 lakh, you have to buy an annuity with 40% of the proceeds.
6. Partial withdrawal is possible after 10 years only if 80% of the proceeds are used to invest in life insurance.

Mutual Funds

Through mutual funds, you can indirectly invest in stocks and enjoy the benefits without worrying about constantly following the market. Fund managers usually collect investments from a pool of investors and plan investments in a diversified portfolio consisting of stocks and bonds. Though they charge a certain amount for doing so, the returns in good mutual funds go as high as 12% per annum.

Learn the Basics

1. Mutual funds are the best investment plan with high returns for investors who can invest smaller amounts and want to enjoy the attractive returns of the stock market.
2. There are options to invest a lump sum amount or even a fixed monthly investment. Some SIPs (Systematic Investment Plans) also offer the option of investing every week or every quarter.
3. The risk is high even more mutual funds since they are linked to the market.
4.  ELSS comes with Tax benefits. The full form of ELSS is Equity Linked Savings Scheme and offers a deduction of up to Rs. 1.5 lakhs under section 80C.

Gold Bonds

India’s love for gold knows no bounds. One of the best investment plans with high returns covers a certain way of investing in gold – through sovereign gold bonds (SGBs). SGBs are government-backed securities that derive their value from the prices of gold. This RBI-issued financial instrument performs well when the stock market doesn’t. SGBs carry interest rates of 2.5% per annum and are highly recommended to diversify your portfolio. Apart from the interest, upon maturity, which is usually in 8 years, SGBs can give returns as high as 12.5% when the stock markets perform poorly.

Learn the Basics

1. Investment in SGBs happens based on grams of gold.
2. There is a 5-year lock-in period during which investment in SGBs cannot be accessed.
3. The maximum limit to invest in SGBs is 4kgs for individuals and 20kgs for trusts.
4. SGBs can be traded on the secondary market.

5. Unit-linked life insurance plans (ULIP)

This investment plan also offers market-linked returns but comes with the added advantage of having life insurance cover at the same time. One of the most popular investment plans for its dual benefits is best used to achieve specific financial goals. It also comes with a tax deduction benefit.

Learn the Basics

1. Long-term and short-term options are available.
2. After a 5-year lock-in period, you can withdraw your investment prematurely in case of an emergency.
3. You can choose the type of funds you want to invest in and also switch the funds in case your investment is not giving desired returns.
4. Your investment is the premium for the insurance, which will be pooled and invested in the market. Premium can be paid monthly, quarterly, yearly, etc.

This top investment option in India offers dual benefits of insurance and market investments, which help you systematically grow your money. You can choose the most suitable policy tenure based on whether you prefer long term or short term investment options. Additionally, ULIP also offers tax benefits under section 80C of the Income Tax Act 1961.

Before making investments in any financial instruments, it is of utmost importance to do your own research and assess the risks associated with the investment. Making an informed choice is the best way to ensure your wealth grows steadily and consistently.

Frequently Asked Questions (FAQs)