Best Long Term Investment Plans With High Returns

There are an infinite number of long-term investment plans to fulfil the needs of investors. So, if you are looking for the best long-term investment plan in India to help you develop your wealth, we have compiled a practical list of the top investment plans in this article. 

Best Long Term Investment Plans

1. Stocks
2. Mutual Funds
3. PPF and EPF
4. Bonds
5. NPS
6. Real Estate
7. Fixed Deposits
8. Senior Citizen Savings Scheme
9. P2P Lending
10. ULIPs
11. Monthly Income Plan
12. Post Office Monthly Income Schemes
13. Sukanya Samriddhi Account
14. Tax Saving Investment

1. Stocks

Stocks are an investment that makes investors the owner of a portion of a firm. It is among the best long-term investment plans in India due to the lack of boundaries on the investment tenure. However, the risk remains high, but so do the returns. This long-term investment plan is taxable for Long-Term Capital Gains (LTCG) and Short-Term Capital Gains (STCG).

2. Mutual Funds

Mutual funds are the best long-term investment plans with high returns because they invest your money in a broad portfolio such as equity, debt, and money market funds. This scheme has a minimum duration of three years and offers tax exemptions up to Rs. 1.5 lakhs. Its returns range between 8-20% and are perfect for investors with medium-to-high risk appetite. 

3. PPF and EPF

The Public Provident Fund (PPF) is among the best long-term investment plans in India. PPF provides guaranteed returns that are declared quarterly by the Government of India.

Employee Provident Fund (EPF) is a retirement benefits system in which employees and their employers contribute a modest amount of their monthly basic pay. These long-term investment plans have a lock-in period of 15 years that can be extended up to five years. The schemes have no associated risk, and the interest rate is 7.1% p.a.

4. Bonds

A bond is a borrower’s guarantee to pay a lender the principal and, in most cases, interest on a loan. Governments, municipalities, and corporations all issue bonds. The returns depend upon the bond you choose, and the period ranges between 5 to 40 years.

5. NPS

The National Pension System (NPS) is one of the best government-backed investing solutions that provides guaranteed pension payouts. The NPS can be invested in bonds, government securities, stocks, and other market-linked assets. It lasts for an age of 70 years, and the market-linked rate is 9-15%, with deductions available under Section 80.

6. Real Estate

Real estate is a long-term investment plan that includes land, houses, and commercial structures that provide prospective capital benefits over time. There is no barrier to investment tenure, and the risk involved is medium. This long-term investment plan is taxable for long-term and short-term gains.

7. Fixed Deposits

Fixed Deposits provide fixed returns over a set period. This long-term investment plan provides guaranteed profits for a time ranging from 7 days to 10 years. Fixed deposits provide stability due to their fixed interest rates (current rate is 4-9% p.a.) and predetermined maturity period.

8. Senior Citizen Savings Scheme

Senior Citizen Savings Scheme (SCSS) is a risk-free tax-saving investment option for seniors aged 60 or more. It is one of the best long-term investment plans in India for the elderly because it provides a consistent income with no risk. The minimum tenure is five years, and the current rate is 8.2% p.a.

9. P2P Lending

P2P lending, or Peer-to-Peer lending, is a type of loan financing that connects individual lenders with borrowers. P2P lending platforms, such as LenDenClub, are the finest investment options since they provide a marketplace where you can analyse borrower profiles, assess credit risk, and choose loans based on your criteria. 

10. ULIPs

Unit Linked Insurance Plans, or ULIPs, are a safe investment alternative with excellent returns that provide you with both investing and life insurance benefits. The minimum tenure is 5 years with medium to high risk, and the returns depend upon the type of plan you choose.

11. Monthly Income Plan

Monthly Income Plans, or MIPs, are debt-oriented hybrid mutual funds that provide the investor with a fixed monthly return. The equity investment ratio is quite low, yet it is just enough to provide you with an advantage in terms of the fund’s stability.

12. Post Office Monthly Income Schemes

The Post Office Monthly Income Scheme is another government-sponsored best long-term investment plan in India that provides a guaranteed monthly income. It is a popular strategy among retirees and other investors looking for a consistent stream of income with low risk. The lock-in period is five years, and the current rate is 4% p.a.

13. Sukanya Samriddhi Account

Sukanya Samriddhi Yojana is a small deposit initiative created by the Government of India for girls as part of the Beti Bachao Beti Padhao Campaign. It intends to cover the costs of a girl child’s education and marriage at an interest rate of 8.2% p.a.

14. Tax Saving Investment

Tax-saving investments are plans that help you gain returns while saving on taxes. These plans save up to Rs. 1.5 lakhs tax under Section 80C. The risk involved is low, and the tenure ranges from one scheme to another. 

Goals for Long-Term Investment 

The type of long-term investment plan you choose depends upon your investment goals, a few of which are mentioned below.

• Buying your house/land
• Children’s higher education
• Marriage of children
• Retirement planning

Benefits of Long-Term Investment 

Choosing a long-term investment plan in India has various advantages to it. A few of the benefits are listed below.

• It is impossible to accurately foresee market conditions, and it is best to invest for the long term to reap the greatest benefits. The longer your investments grow, the larger the returns. 
• It’s provide you with ample time and opportunity to swap between funds and compensate for any underperforming funds.
• Small market changes have less of an influence on long-term investment plans. As a result, you can make long-term investments without concern.
• Long-term investment plans make it simple to plan for taxes each year. You need to invest consistently in long-term investment plans to qualify for tax breaks under the Income Tax Act of 1961.
• You can use it to plan for major milestones such as buying a house, a child’s education, retirement, etc, as you invest for the long term.

Conclusion

Long-term investment plans help strategise your future effectively. The risk appetite discussed above and the returns tip the scales when choosing the best long-term investment plan in India. However, your investment goal becomes the deciding factor. Happy investing!

FAQs

Why are long-term investments good?

Long-term investments not only help you achieve your distant dreams like buying a house, marriage, and children’s education but also decrease your tax liability and maximise the chance of growth by promising higher returns. 

Which investment is best for the next five years?

A few investments perfect for the next five years are fixed deposits, bonds, ULIPs, MIPs, stocks, etc. However, you must first understand your investment goal and choose the one which best suits your investment goals.

Should I invest in gold?

If you wish to protect yourself against inflation by investing in a safe-haven asset like gold, then yes, you should invest in gold. Gold has a history of maintaining its value, making it a useful investment against inflation.