Top 6 Best Investment Plan For The Middle Class
Table of Contents
1. Public Provident Fund
Best Investment Plan For The Middle Class in India in 2022. The Public Provident Fund (PPF) is one of the popular investment options for the lower-middle-middle class population in India. The PPF was established by the Central Government of India. You can open a PPF account at a post office or official bank branch.
Investment Deposit Amount Limit in Public Provident Fund (PPF):
You have to invest a minimum of Rs.500 and a maximum of Rs.1,50,000/- in a financial year in your Public Provident Fund (PPF) account.
Frequency of depositing the amount in the Public Provident Fund (PPF) account:
You can deposit the amount in your PPF account a maximum of 12 times in a financial year or any number of times less than 12 but up to the maximum amount that is Rs. 1,50,000/- per year.
Investment Period and Withdrawals:
PPF investments have a fixed term (Lock-in Period) of 15 years. PPF is one of the best long-term options. You can make partial withdrawal prematurely to meet certain conditions but only after the completion of 5 financial years.
For Example:
Case #1: You can deposit Rs. 12500/- every month that equals Rs. 150000/- I a year.
Case #2: Random amounts like 5000, 7500, 15000, 25000, 50000 you can deposit but a maximum of Rs. 150000/- in a whole financial year.
Case #3: If you deposited Rs. 36000, Rs. 22000, Rs. 45000 which is a total of Rs. 1,03,000/- and not able to deposit further amount then no problem this amount is considered as an investment for that particular.
Tax Benefit:
Under Section 80C of the Income Tax Act, 1961, a tax deduction of up to Rs.1,00,000/- is available. This is one of the best investment schemes in India for the middle class which reduces your tax liability.
2. Mutual Funds
Mutual funds are a very beneficial investment option, made for all types of people. There are some mutual funds that allow you to invest in it with as low as Rs. 100 per month also. Investing in mutual funds carries some risk but it’s always profitable as you take a calculated risk. It’s historically known that Mutual funds with the highest returns are better returns than most of the fixed-return investment instruments like FDs. If you want higher returns from your mutual funds, you can choose high risk but high return mutual funds. Investors are more restrained and do not react immediately to market movements. Therefore, it is more profitable for them to invest in market related investments. If you think you are one of these types of investors, there are some investments available for you.
a) Equity Funds
Equity mutual funds invest mainly in stocks and other equity instruments. Returns are market related and therefore returns are not guaranteed. Long-term investments in equities certainly yield higher returns than other investments, so long-term investments will always be better to maximize profits. You can also invest in Equity Funds through SIP, in which you can invest up to Rs. You can also invest from Rs.500 / -.
b) Hybrid Funds
Hybrid funds invest in equity and debt funds. Their returns depend on the market and are best suited for medium-term (3-5 years) investments. They are less volatile than equity funds but more risky than debt funds.
The above investments are highly volatile and do not guarantee the return you want as they are linked to the market. However, these funds can offer good returns in the long run.
3. National Pension Scheme (NPS)
NPS is the best government established investment scheme and provides retirement benefits for the citizens of India. Depending on the choice, it invests the money in equity, bonds, government securities, and alternative investment options. If you want to know how to open a new pension scheme account online click here.
You can withdraw your investments in NPS only after you attain the age of 60. After 2010 in government Job also it is mandatory. The regulating authority for this fund is the Pension Fund Regulatory and Development Authority (PFRDA).
4. Fixed Deposits
Fixed deposits are a traditional investment that gives guaranteed fixed returns to the depositor and is mainly meant for conservative investors with very low to zero risk appetite. You can make a fixed deposit of your preferred duration, varying from 7 days to 10 years, from any of the banks or post offices. Currently, Fixed Deposits are the lowest interest rates but are safe and secure investments. You have lots of best investment plans with high returns for 1 year then why go for Fixed Deposits.
5. Unit Linked Insurance Plans (ULIPs)
A Unit Linked Insurance Plan is another best and most popular investment option offered by lots of insurance companies these days. It provides dual benefits of insurance as well as an investment under a single integrated insurance plan. With ULIPs, a part of the premium is invested in equity, debt, or hybrid funds. The other part is used to provide life insurance cover to him/her.
6. Investing in the stock market
Definitely gives good returns from investing in a good company through the stock market. Even if you don’t know much about investing in the stock market in the beginning, you can invest a small amount in a good company. You can get help from your investment advisor or broker.
Which Is The Best Investment Plan In India For Middle Class
| Plan | Return | Risk | Tenure | Benefits | |
| 1 | Public Provident Fund (PPF) | 7.10% | No Risk | 15 years | Deductions up to Rs. 1.5 lakh u/s 80C |
| 2 | Mutual Fund Investing | Flexible | Moderate Risk | Flexible | Deductions up to Rs. 1.5 lakh u/s 80C (Under ELSS funds). Qualifies Capital Gains Tax. |
| 3 | National Pension Scheme (NPS) | 10%-12% | Low to Medium | 18-65 years | Deductions up to Rs. 1.5 lakh u/s 80C; Extra Deduction Rs.50,000 u/s 80 CCD(1B) |
| 4 | Fixed Deposit Schemes | 6% or Flexible | No Risk | 7 Days | Deductions up to Rs. 1.5 lakh u/s 80C. |
| 5 | Unit Linked Insurance Plan (ULIP) | Flexible | Moderate Risk | 5 Years | Rs. 1.5 lakh Deductions u/s 80C. |
| 6 | Investment in Share Market | Flexible | High | Flexible | Exemption on income earned from selling shares up to Rs. 1 lakh after that 10% tax. |
| 7 | Post Office Monthly Income Scheme (POMIS) | 6% -7% | Low Risk | 5 Years | Taxable based on slab rates. |
| 8 | Gold Investing | Flexible | Moderate Risk | Flexible | Capital gains tax |
| 9 | Sovereign Gold Bond (SGB) | 2.50% | Low Risk | 8 Years | Interest is taxable |
| 10 | Recurring Deposit Account | 6% or Flexible | No RIsk | 6 Months | Deductions up to Rs. 10,000 lakh u/s 80TTA. Taxable based on slab rates. |
| 11 | Savings Account | 3%-4% | No Risk | Flexible | Deductions up to Rs. 10,000 u/s 80TTA. Taxable based on slab rates. |
| 12 | Senior Citizens Saving Scheme (SCSS) | 7.40% | No Risk | 5 years | Deductions up to Rs. 1.5 lakh u/s 80C; Interest is fully taxable |
| 13 | RBI Bonds | 7.15% | Low Risk | 7 Years | Capital Gains Tax; Interest on bonds is taxable. |
| 14 | Real Estate Investing | Flexible | Moderate Risk | Flexible | Capital gains tax |
| 15 | Index Investing | Flexible | Moderate Risk | Flexible | Capital gains tax |
| 16 | ETF Investing | Flexible | Moderate Risk | Flexible | Capital gains tax |
| 17 | Government Securities | 6%-7% | Low Risk | 5 – 40 Years | Deductions up to Rs. 1.5 lakh u/s 80C. |
| 18 | Pradhan Mantri Vaya Vandana Yojana (PMVVY) | 8% | Low Risk | Flexible | Not eligible for deductions. Taxable based on slab rates. |
| 19 | Hybrid Funds | Flexible | Moderate Risk | Flexible | Deductions up to Rs. 1.5 lakh u/s 80C. Qualifies Capital Gains Tax. |
| 20 | Crypto Investment | Flexible | High Risk | Flexible | It is taxable. Not regulated by RBI. |
You can invest your money such as Gold ETFs, Post Office Monthly Income Scheme, RBI Bonds, and Senior Citizens Savings Scheme. these are some best Investment Plan For The Middle Class. However, it’s prudent to consider your financial goals, investment horizon, and risk appetite before investing your hard-earned money in any investment avenue. Investing in the right and Best investment plan is one way an individual can become rich over a short span of time. One must carefully calculate their risk profile as well as requirements before making any investment-related decisions.
To select the Best Investment Plan for the Middle Class, you should consider the following things
Investment Goals
What financial goals do you want to achieve with the return on your investment? Such as buying a car, building a house, or amassing wealth. You can have multiple goals, make a list of all your goals, and make a priority list based on the key and when you want to achieve them.
Investment Period
Once you have set your goals, define your goals based on the investment period. For example, define each goal as a short-term goal or a long-term goal. The duration of a short-term goal is less than five years, and anything beyond five years is a long-term goal.
Risk
Calculate your risk absorbing level or discuss it with a qualified and certified financial advisor. Based on your goals, you can choose from the investments mentioned above.
