Long-term investment plans help you to build a sizeable corpus over 7-10 years or more. You can use this corpus to meet your long-term goals such as the purchase of a house, children’s education, or wedding, and retirement. When you hold investments for a longer period, you can potentially earn better returns and more capital gains. You can correct your mistakes and mitigate the risks. Moreover, long-term investment plans can help you build a robust and lucrative portfolio suitable to your risk profile and financial goals.
Here are the top 5 long-term investment options for you to consider:
Bank Fixed Deposits (FDs)
Bank FDs are one of the safest and most popular long-term investment plans in India as they give assured returns. You can also make premature or partial withdrawals in case of an emergency. The ongoing interest rate on FDs is between 5% and 7% (it is usually 0.5% higher for senior citizens).
However, FDs offer low returns as compared to other market-lined instruments and fail to counter inflation risk.
Public Provident Fund (PPF)
PPF is another fixed-income plan most preferred by conservative investors. The minimum lock-in period is 15 years after which you can withdraw the entire principal amount with interest. You can make a partial withdrawal after 5 years. The current interest rate is 7.1% compounded annually.
Though PPF is a safe instrument, the liquidity factor is low due to the long lock-in period. Also, the maximum investment limit is only Rs1.5 lakhs per annum.
Being a tangible asset, many investors like to put their money in property as a long-term option. Real estate prices usually follow an upward movement that appreciates the valuation of the property.
However, real estate has its drawbacks. For example, it is not easy to liquidate real estate when you need urgent cash. The investment amount and transaction costs are also high. You also need to spend money on its maintenance and upkeep.
Mutual funds are ideal for investors of all risk profiles, especially those who are stock market amateurs. They are professionally managed by qualified and experienced fund managers. You can choose a mutual scheme as per your investment goals. The returns are usually better than FDs and PPF.
Unfortunately, you do not have control over mutual investment as all major decisions are taken by the fund managers.
Your investment portfolio is incomplete without direct equity. Historical market trends have shown that direct equity can beat inflation and gives better rewards than any other investment option in the long term. You can invest directly in the stock market and have complete control over your investment. There is easy liquidity because you can exit anytime.uploadarticle.com
Do note that direct equity requires extensive knowledge and research of the stock market to time the entry and exit right for good returns. Purnartha, a reliable and experienced equity advisory company can hold your hands for direct equity investment. It is a SEBI-registered advisory and PMS company that follows a customer-centric and research-based approach. It helps investors make the most of their direct equity investments as part of its investment advisory and Portfolio Management Services (PMS).