Long-term Investment Options

Best Long-term Investment Options You Should Know

Maximum investors desire to have maximum returns with the lowest risks. But these two factors are directly proportional to each other. Long-term investments involve lower risk comparatively while the investment corpus is huge. These investments include financial and non-financial assets. The financial assets are then categorized further as the products linked to the market and products with fixed income. Market-related products include investment tools like shares, mutual funds, stocks, or equity funds. Whereas investment tools like Public Provident Funds or FDs come under fixed income products. Non-financial products include real estate, gold, etc.

Best investment plan for the long term is all about earning more than only preserving your capitals. But before making long-term investments you must create a diverse portfolio. It is better to research thoroughly about the plans you are investing in. Don’t start investing without setting a financial goal or making a strategy. Read all the terms and conditions especially the inclusions and exclusions. Observe the market properly and try to understand how much can you earn from the investment plan after a certain period. Get help from experts or in the future you may face problems.

A best long term investment plan comes up with certain benefits. Like –

  • With a longer period of investment, you can earn huge profits. The invested money grows with time as they are directly proportional to each other.
  • The power of compounding attracts young investors in long term investment plans. This increases the return rate.
  • They allow diversification of the investment portfolio effectively. Thus mitigating the risk factor. Loss in one investment can be overcome by the profits of another.
  • It allows you to rectify your investment mistakes.
  • The risks associated with long term investment plans are comparatively less than short term plans.

Few best long term investment options.

Have you decided to invest in long-term investments? If yes, then you must know some of the best long term investment options available in the current market scenario. Here’s some of them –

  • Mutual Funds – Investing in mutual funds may be risky but you cannot overlook the high return rates. They are market-linked funds that invest money in instruments like debt, equity, stocks, etc. Mutual funds are generally categorized as –
  1. Equity Mutual funds – 65% of the assets are invested inequities. They are highly risky but earns a higher rate of interests. These funds are invested in companies with different market capitalisation. These funds can be actively managed or passively.
  2. Debt Mutual funds – investments are made on instruments like corporate bonds, commercial paper, treasury bills, and other money market instruments where the investors earn a fixed rate of interest. These are less risky than equity funds. Risks here include interest rate risk and credit risk.
  3. Hybrid funds – Invests in more than one investment class like stocks and bonds. They allow portfolio diversification.
  • PPF or Public Provident Funds – These funds being supervised by the government is the safest investment plan. This fund enjoys the benefit of tax exemption under section 80C, Income Tax Act. The maturity period is 15 years. If you want to extend the period by five years or more, it is possible by applying for extension within a year of maturity. The minimum amount required to be invested is Rs. 500. This amount can be extended maximum up to Rs. 1.5 lakh.
  • National Pension System – It is managed by the Pension Fund Regulatory and Development Authority. NPS is a long term investment plan that focuses mainly on your retirement. They invest in money market instruments like fixed deposits, equities, corporate bonds, and government funds. For NPS tier-I account the minimum annual investment has been decreased to Rs 1000 and for tier-II, the contribution is Rs. 250 annually. You can invest as per your affordability and risk-taking capacity. You can withdraw funds from the tier-I account after retirement whereas tier-II account allows withdrawal without any restrictions.
  • Investment in Stocks – Investing in stocks may not guarantee you higher returns but keeping it in your investment portfolio may help you to earn an extra amount in the long run. This is highly risky but your capital grows surprisingly. There are a variety of stocks and selecting the best one among them is quite hard and request a lot of patience and research work.
  • Investing in shares and long term Bonds – Various companies and also the government, sometimes require money for developing new projects or expanding old one. For this purpose, they need huge financial corpus and Bonds are nothing but an instrument to borrow money. They have a fixed rate of interest and offers a decent return on an investment after the maturity period.
  • Fixed Deposit – These are the easiest and the most common investment instrument offered by several Banks. It is risk-free, and the interest rate is pre-fixed by the government. They offer flexibility for choosing your tenure of investment. This tenure can be extended up to 10 years.
  • Senior Citizens’ Saving Scheme – This investment portfolio is for senior citizens of early retirees. The tenure of the portfolio is 5 years, and it can be extended up to 3 years more after the scheme matures. An investor can have more than one account, and a maximum limit is Rs. 15 lakh. One needs to pay the interest rate quarterly, and this scheme is taxable.
  • Real estate – You can invest in buying properties, and the returns from the investment can be either from capital appreciation or from rentals. The location of the property is important to increase return rates. The risk associated with this investment scheme is to get the necessary regulatory approvals from the real estate regulator.

There are several long-term investment options, and you need to make researches on each one of them before investing.


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