Investment options for beginners in India

Education Personal Finance

If you’re just getting started, investing may seem overwhelming, but it’s an essential step in growing wealth and saving for a variety of financial objectives. Don’t become too preoccupied with whether or not now is the ideal time to begin investing because you will come across a variety of market settings during your investing career. You may take full advantage of the benefits of a long-term investing horizon by starting to invest when you are young.

Here is a list of 8 investment options for beginners in India.

  1. Bank Fixed Deposits

Deposits in banks are for people who don’t like taking chances. Minimal-risk investments have low returns, nevertheless. You can invest in fixed deposits if you have a lump sum of money available. Fixed deposits are among the most popular fixed-pay investment options. Like their name suggests, FDs provide fixed returns for the course of the investment. According to bank regulations, profits are payable every month, every three months, or every year.


  • A fixed deposit’s returns are certain.
  • Depending on the term you select, a fixed deposit’s interest rate changes.
  • For an FD, you can select a duration of 8 days to 10 years.
  • The fixed deposit’s maturity duration or tenure determines the interest you will receive.
  • If you need money right away, you can apply for a loan against your fixed deposit.

2. Public Provident Fund (PPF)

There are a few government initiatives that you can invest in. The Public Provident Fund is the most well-liked government savings program. It has a 15-year lock-in period and provides returns of between 7% and 9% annually. Compound interest can be earned on the accumulated funds. The next five years’ time frame may potentially be extended. The fact that you can withdraw the money you put in a PPF account before the end of the sixth year is its only drawback.


  • A PPF account must be open for at least 15 years.
  • In a PPF account, both the capital and the interest amount are safe and guaranteed.
  • For investing in PPF the minimum amount should be 500
  • The benefit of receiving loans in exchange for investments is another benefit of PPF.

3. National Savings Certificates (NSC)

You can open a National Savings Certificate at any post office location, which is a fixed income investment program .The program is a project of the Indian government. There is no maximum investment; the minimum investment is Rs 1000. On the other hand, the Indian government will base its interest rate determination on factors such as inflation.


  • Fixed rate of return.
  • You can start with a 1,000 INR initial deposit and raise it as soon as it is practical.
  • It takes five years for maturity.
  • NSC is accepted as security or collateral by banks and NBFCs for secured loans.
  • In the tragic case of the investor’s passing, a family member can be nominated to inherit it.

4. Government Securities

Government debt is issued in the form of government securities, which are then used to pay for military and infrastructure projects as well as ongoing operations. Investors can choose from a variety of assets that the Indian government produces, including bonds and treasury bills. However, depending on the securities, the maturity time may range from 91 days to 40 years. The greatest government investment plans with high returns that can efficiently produce high income are government securities.


  • Only the central government, state governments, and semi-government authorities are permitted to issue government securities.
  • Low interest rates are charged on government securities. It has a lower return than any other type of investment.
  • These securities do not appeal to brokers.

5. Mutual Funds

The perfect investment strategy that provides high returns on the investment over the long term is mutual funds, one of the popular investment options in India. It is a form of business investing that places money in a variety of financial products, including equities, loans, money market funds, and many other types of securities. You don’t need to be familiar with the market. Mutual funds are expertly run by fund managers with a proven track record of running successful investment portfolios.


  • Mutual funds enable you to diversify your investment portfolio and assist you in achieving your investment goal.
  • The transparency of mutual fund investing enables investors to make wise decisions.
  • There is a designated fund manager for each mutual fund scheme who aids you in selecting a profitable investment for the plan.

6. Stocks

Among all investment options, investing in stocks gives you the possibility to get the best returns. with a long term investing horizon. However, market expertise is necessary in order to invest in stock markets. If not, you ought to avoid the stock market. Without market expertise, investing in stocks is equivalent to gambling.


  • The stock market is a regulated marketplace.
  • The stock exchange only trades the securities that are listed there. A securities is listed on the stock exchange when certain prerequisites are met.
  • Only through the authorized members can investors sell and buy shares on the stock exchange.

7. Exchange-traded funds (ETF)

A pooled investment security called an exchange-traded fund functions very similarly to a mutual fund. ETFs are like conventional stocks in that they may be bought or traded on a stock exchange. The minimum investment for ETFs is lower than that of mutual funds, which is normally a few thousand dollars.


  • Compared to actively managed mutual funds, ETFs often offer reduced management fees and expenses.
  • ETFs with a low minimum investment amount allow investors to create diversified portfolios.
  • The two facets of ETF transparency are portfolio and price.

7. Unit Linked Insurance Plan

One of the best investment alternatives in India is thought to be unit-linked insurance plans. Life insurance and investing are combined in a unit-linked insurance plan. To create wealth over the long term, a portion of your premium is invested in asset classes like bonds and stocks. Your premium also includes money for a life insurance policy.


  • You can select the types of funds you wish to invest in with ULIPs based on your risk tolerance, which is one of its features.
  • You can transfer from one fund type to another if you anticipate a change in market conditions or if your needs change with regard to your investment.
  • One of the most important aspects of a ULIP is the ability to withdraw money from your plan.
  • You might want to occasionally boost your investment as your requirements and stage in life change.