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Here's how you can secure your financial future with our guide to the most the best investment options for the modern salaried professional.
We are always told to dream big.
Whether you are planning for a dream vacation, a secured retirement or you are just planning to increase your wealth, investment can become your true best friend.
In a world where financial security is of utmost importance, It's necessary to opt for a suitable investment option to have a stable and prosperous future.
Gone are the days when investment is deemed to be a risky one. If you play smart with investment, you shall be able to take control of your financial destiny in no time!
The Best Investment Options for Salaried Person
Here are some of the best investment options for salaried person. These investment options will show you the road to wealth creation for a salaried employee.
INVESCO India Tax Plan Direct-Growth
Invesco India Tax Plan Direct-Growth is one of the best investment options for salaried person aims to generate long-term capital growth through a diversified portfolio comprising equity and equity-related securities.
The fund adopts a bottom-up approach to invest across market capitalisation sectors. With a focused approach, it maintains a well-researched portfolio of approximately 20 to 50 stocks.
Over the last year, Invesco India Tax Plan Direct-Growth has delivered impressive returns of 14.33%.
Since its inception, it has consistently provided an average annual return of 16.37%. What's remarkable is that the fund has a track record of doubling the invested capital approximately every four years. This makes it an appealing choice for long-term investors.
Public Provident Fund (PPF)
This government-backed savings scheme offers an attractive combination of fixed returns, long investment tenure, and substantial tax benefits, making it a preferred choice for many investors, especially salaried individuals.
One of the primary reasons individuals opt for PPF is the safety it offers.
The interest earned on your PPF investment is backed by a sovereign guarantee. This means that the government guarantees the repayment of both the principal and interest, making it one of the safest investment options available.
In comparison, bank fixed deposits are only insured up to Rs 1 lakh by the Deposit Insurance and Credit Guarantee Corporation (DICGC). Therefore, PPF provides a higher level of safety and assurance.
The current interest rate for Q3 (October-December) FY 2023-24 for PPF accounts has been set at 7.1%, compounded annually.
This rate is often more favourable when compared to fixed deposit (FD) rates in many banks. PPF's higher interest benefits make it an attractive option for those seeking both security and growth in their investments.
It is truly one of the best investment options for salaried person.
If you are looking for some safe investment options for a salaried person, gold can be the right choice.
Gold has been an integral part of India's culture and tradition for centuries. It holds not only ornamental and cultural significance but is one of the best investment options for salaried person.
It holds a prominent place in the world of investments.
One of the standout features of gold as an investment is its ability to act as a hedge during equity market downturns.
When stock prices are falling, the value of gold often rises. This inverse relationship can help protect your overall portfolio during economic uncertainties.
In India, if you are looking for an investment plan for 40,000 salary, gold is the best choice.
There are several avenues for gold investments to cater to the diverse preferences of investors. These include physical gold like gold jewellery, coins, and bars. Many people prefer the tangibility and ornamental value of physical gold.
You can also invest in paper gold. For those looking for a more convenient and liquid form of gold investment, options like Gold Exchange Traded Funds (ETFs) and equity-based gold funds are available.
These allow investors to participate in the gold market without holding physical gold.
SBI Bluechip Fund Direct-Growth
SBI Bluechip Direct Plan-Growth, a prominent offering from SBI Mutual Fund, has a decade-long history of helping investors achieve steady growth in their capital.
The primary objective of the SBI Bluechip Direct Plan-Growth is to offer investors opportunities for long-term capital growth.
What sets SBI Bluechip Direct Plan-Growth apart is its ability to control losses during market downturns.
Over the past year, SBI Bluechip Direct Plan-Growth has delivered reliable returns of 11.13%.
Since its inception, it has consistently provided an average annual return of 14.89%. This makes it an attractive proposition for investors with a long-term horizon.
Recurring Fixed Deposits
With its enticing interest rates and investor-friendly policies, a recurring fixed deposit plan (RD) can be an excellent choice for those looking to build a more secure financial future.
Opening an RD account is hassle-free with relaxed eligibility criteria.
It's available to Indian residents, senior citizens, minors with guardians, and non-resident Indians (NRIs). RD interest rates can go as high as 8.50% p.a., depending on the investment terms and issuer, helping you grow your wealth over time.
Many RD issuers allow you to take a loan against your deposit, providing quick access to funds, usually up to 90% of your investment.
What makes this plan so good is that RDs are accessible to people with modest incomes, as they can often be started with as little as ₹100 a month.
ICICI Prudential Regular Savings Fund Direct-Growth
ICICI Prudential Regular Savings Fund Direct-Growth is a well-established Conservative Hybrid mutual fund scheme offered by ICICI Prudential Mutual Fund.
ICICI Prudential Regular Savings Fund Direct-Growth follows a conservative hybrid approach, allocating a significant portion of its assets to debt instruments (74.37%) while maintaining a modest exposure to equity (22.83%).
This balanced approach is ideal for investors seeking both stability and growth potential in their investment portfolio.
Over the past year, ICICI Prudential Regular Savings Fund Direct-Growth has delivered a respectable return of 8.69%.
Since its inception, it has maintained an average annual return of 10.44%. The fund can double the invested capital approximately every eight years, offering steady growth opportunities for long-term investors.
National Pension Scheme
The National Pension Scheme (NPS) is a government-backed, fixed-contribution pension system designed to provide financial security during retirement.
It offers investors the flexibility to allocate funds to both equity and debt components, making it an attractive choice for those planning for their post-retirement years.
One of the standout features of NPS is the flexibility it offers in determining your investment allocation.
Investors can choose the percentage of their contribution to be invested in equity and debt. For those who don't make a choice, the age-based criteria come into play. Until the age of 35, the exposure to both equity and debt is set at 50%.
Afterwards, equity exposure is reduced by 10% every five years.
Exiting the scheme is a crucial aspect of any retirement plan. If you choose to exit NPS before the age of 60, 80% of your accumulated savings must be used to purchase a life annuity from an IRDA-regulated insurance provider.
The remaining 20% can be withdrawn as a lump sum. However, if you exit the scheme after the age of 60, you are required to use 40% of the accumulated savings to purchase a life annuity.
Investment options for salaried person for tax exemption
Life insurance is one of the best investment options for a salaried person.
It isn't just about providing financial security to your loved ones in the event of your absence; it's also an excellent tax-saving tool. You can choose from various life insurance plans, including endowment, term, and money back, and they all offer tax benefits on premiums paid and redemption.
Life insurance provides essential financial coverage to your family in case of your unfortunate demise, helping them maintain their lifestyle and meet their financial needs.
Tax Benefit: Enjoy tax benefits under Income Tax Section 80C for premiums paid and Section 10(D) for maturity proceeds. It's a win-win situation—protect your family and save on taxes.
Employee Provident Fund (EPF)
The Employee Provident Fund (EPF) is one of the most popular and efficient tax-saving avenues for salaried professionals.
It is a retirement fund governed by the Employees’ Provident Fund and Miscellaneous Act, of 1952.
Both you and your employer can contribute up to 12% of your salary to this fund, offering you a secure and consistent rate of interest on your investments.
Unit Linked Insurance Plans (ULIPs)
Unit Linked Insurance Plans, or ULIPs, are an innovative combination of insurance and investment.
They offer the dual benefit of protecting your family financially and growing your wealth through smart investment choices.
One of the key advantages of ULIPs is that they fall under the EEE category, which stands for Exempt, Exempt, Exempt. This means that you can enjoy tax benefits at every stage:
- Premiums Paid: The premiums you pay are eligible for tax benefits.
- Returns Gained: The returns you earn on your investments are tax-free.
- Sum Assured on Maturity: The sum assured upon maturity is also tax-exempt, provided you meet specific conditions and adhere to the latest tax guidelines.