Defined Benefit Pension Plan

Which Investment Plan Gives You the Best Returns?

It is said a smart person always saves the income for future emergency but the smarter one invest the income even more smartly to increase the saving. Thus, it is very important that whenever you decide to invest, check out all the options available in the market and if it will match your requirements or not. In this article, we will explore the types of investment and which one is apt for you.

Types of Investment Plans

  1. Traditional Life Insurance- In this, a person buys a life coverage policy for fixed period and pays premium for that annually, monthly or quarterly and receives the sum assured as mentioned in the policy. It can be for long-term (for instance, the money received after the death of insurer) or short-term (for car or house or education purpose). It is for those who prefer to do safe investment with guaranteed coverage.
  2. ULIP (Unit Linked Investment Plans) – This policy is apt for those who need life insurance + investment profits. In short, under this policy, some part of the premium you pay will be invested in mutual funds, which will further be invested in stocks. Thus, here the insured receives the insurance coverage as well as fund unit as per the performance of the stock in which his/her money is invested. ULIP is also flexible in nature as you can anytime increase the policy amount. It is also a good way to save tax, however it is expensive.
  3. Mutual Funds- This is for only for those who just want to invest. In short, here the funds of different policy owners are directly invested in stocks of various industries and thus, the policy owner receive the return on investment as per the performance of the stock and the number of the units he/she purchased. It keeps on fluctuating, thus, the risk involved is high. Moreover, there is no tax benefit for the investor as such. Now, you may think, why invest in mutual funds, if it is volatile, risky as well as offers no tax benefits? The point to keep in mind is that it is not that costly and can offers tax benefits as per section 80 C if one invests in Equity Linked Savings Scheme. So, the dividend you receive after investing is completely tax free. Moreover, one really does not need to be an expert to invest on this plan. Still if required, you can hire an expert.

Beside these, there are few other options available where one can invest-

  • Fixed Deposit- It is apt for those who need to save money without taking any risk at all. Here, the person with a bank account can easily open the fixed deposit account and deposit the money for a desired period of time. Hence, it is also called as term deposit. The deposited money keeps on multiplying as the customer receives rate of interest as per decided by the bank (Rate of interest is high for fixed deposit account than other accounts and may varies from bank to bank).
  • Gold and Silver- Investment in metal especially gold is considered very beneficial. Gold is something that will always remain precious no matter which time period we are. Thus, investment on gold is bound to give good returns on your investment
  • Real estate- Investing in properties is not a bad idea. Population is ever increasing, so the demand for land will also increase in the long term for setting up of industries, hospitals, schools and residential projects. The price of land always increases after few years. In fact, people who bought land in the outskirt of cities 5-10 years back have experienced dramatic price rise in the recent years.

Earning money may be hard but investing it properly and wisely is event harder. It is good to remember that investment requires patience and long term vision. So there is no need to jump to conclusion without thinking properly and you should always go for long term investment as returns will be higher.

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