10 Best Long Term Investment Options in India – 2023

Investing for the long term comes with many benefits, including compounding interest, lower taxes, and the potential for higher returns. By investing for the long term, you give your investments more time to grow and weather any short-term market volatility. This means you can create wealth over time and achieve your financial goals.

The country’s economy is growing at a steady pace, and there are many investment opportunities available. So we say that 2023 is a great time to invest in India.

The Indian government has also taken several initiatives to boost economic growth, such as reducing corporate taxes and promoting foreign investment. This has made India an attractive destination for investors.

In this article, we will explore the long-term investment plans in India that can help you create wealth. Whether you’re a beginner or an experienced investor, there’s something for everyone.

So, let’s get started and explore the best investment options for wealth creation in India!

1. Equity Mutual Funds

Equity mutual funds are a popular choice among investors as they offer the potential for high returns over the long term.

Investing in equity mutual funds allows you to invest in a diversified portfolio of stocks, managed by professional fund managers. This can help minimize risk and maximize returns over the long term. Equity mutual funds have historically offered higher returns than fixed-income investments, such as bank deposits or bonds.

According to the latest data, some of the top-performing equity mutual funds in India in 2023 include Mirae Asset Large Cap Fund, Axis Bluechip Fund, and ICICI Prudential Bluechip Fund.

2. Public Provident Fund (PPF)

If you’re looking for a long-term investment plan in India, then the Public Provident Fund (PPF) is definitely worth considering. PPF is a government-backed savings scheme that encourages individuals to save money for their retirement.

Investors can open a PPF account with a minimum amount of Rs. 100, and they can invest a maximum of Rs. 1.5 lakh per year for a period of 15 years. The current interest rate on PPF is 7.1%, which is compounded annually.

So in short its tax benefits, compounded interest rates, and government-backed security make it a great option for investors looking for a stable and reliable investment avenue.

3. National Pension Scheme (NPS)

For the best long-term investment options in India, the National Pension Scheme (NPS) is worth considering. NPS is a voluntary contribution retirement savings plan, regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

NPS works like a typical investment scheme, where you choose a pension fund manager and invest a certain amount of money in your NPS account. The money is then invested in various asset classes like equity, government bonds, and corporate bonds, based on your risk appetite. On retirement, you can withdraw a lump sum or opt for a regular pension income.

As of March 2023, the current interest rates of NPS schemes range between 9.50% to 12.00%, depending on the fund manager and investment option chosen. Moreover, NPS offers an additional tax benefit of up to Rs. 50,000 under Section 80CCD(1B) of the Income Tax Act, over and above the limit of Rs. 1.5 lakh available under Section 80C.

4. Real Estate

Real estate can be a lucrative long-term investment option in India for those seeking wealth creation. Investing in real estate can provide a stable source of passive income through rental properties, as well as the potential for capital appreciation. Additionally, real estate can provide a hedge against inflation, as property values tend to rise over time.

As of 2023, the real estate market in India is showing signs of recovery after a slowdown in recent years. According to a report by Knight Frank India, the residential real estate market is expected to grow at a CAGR of 11.2% between 2022 and 2025. Factors such as low-interest rates, government initiatives, and increased demand for affordable housing are contributing to this growth.

Investing in real estate requires careful consideration and research to ensure a profitable investment. It is essential to consider factors such as location, market trends, and property type before making any investment decisions. However, for those willing to take the time to make informed decisions, real estate can be an excellent long-term investment option in India.

5. Direct Stocks

Direct stocks can be a great option if you’re willing to take some calculated risks. Here are some of the top-performing stocks in India in 2023:

HDFC Bank Ltd: With a market capitalization of over Rs 9 lakh crore, HDFC Bank is one of India’s largest private sector banks. The stock has been consistently performing well and has shown strong growth potential.
Reliance Industries Ltd: Reliance Industries is one of India’s largest conglomerates, with interests in petrochemicals, refining, oil, and gas exploration, and telecommunications.
Tata Consultancy Services Ltd: As India’s largest IT services company, Tata Consultancy Services has been a consistent performer in the stock market.
Bajaj Finance Ltd: Bajaj Finance is one of India’s leading non-banking financial companies, providing loans for consumer durables, personal loans, and small business loans.

6. Gold

When it comes to long-term investment plans in India, gold is often considered a safe haven for investors looking to diversify their portfolios. Investing in gold is a popular way to hedge against inflation and economic uncertainties.

Gold can be purchased in various forms such as physical gold (bars, coins, jewelry), gold ETFs (exchange-traded funds), and gold mutual funds.

The top 3 gold investment options in India for 2023 are:

Sovereign Gold Bonds (SGBs) – These are government securities denominated in grams of gold. They offer a fixed interest rate of 2.5% p.a. and are redeemable after 8 years. SGBs are traded on stock exchanges and can be bought in demat form.
Gold ETFs – Gold ETFs are exchange-traded funds that invest in physical gold. They are traded on stock exchanges and can be bought and sold like any other stock. Gold ETFs offer the advantage of lower costs and high liquidity.
Gold Mutual Funds – Gold mutual funds invest in gold mining companies, bullion, or a combination of both. These funds offer the advantage of diversification and professional management.

7. Fixed Deposits (FD)

Another secure return on investment option is fixed deposits (FDs) are a popular option. An FD is a type of investment where you deposit a fixed amount of money for a specified period, and the bank pays you a fixed interest rate on your investment. It is a safe investment option as it is backed by the government and offers guaranteed returns.

As of 2023, the interest rates for FDs in India range from 4.5% to 6.5% depending on the bank and tenure of the FD. Interest rates are subject to change based on market conditions and RBI policies. FDs are ideal for risk-averse investors looking for a safe and steady return on investment.

However, it’s important to note that FD returns are taxable, and the interest earned on an FD is added to your taxable income. Therefore, you should consider the tax implications before investing in FDs. Overall, FDs are a great investment plan in India with high returns for those looking for a safe and secure long-term investment option.

8. Senior Citizen Savings Scheme (SCSS)

When it comes to long-term investment plans in India, the Senior Citizen Savings Scheme (SCSS) is an attractive option for investors seeking stable returns.

The scheme offers senior citizens a risk-free investment opportunity with a fixed interest rate of 7.4% per annum, payable quarterly. The minimum investment amount is Rs. 1,000, and the maximum is Rs. 15 lakhs. The scheme has a tenure of 5 years and can be extended for an additional three years. One of the main benefits of the SCSS is that it offers tax benefits under Section 80C of the Income Tax Act, up to Rs. 1.5 lakhs per year.

9. National Pension Scheme (NPS)

Another option is NPS, National Pension Scheme (NPS) is one of the best long-term investment options in India, especially for retirement planning.

NPS is a voluntary contribution retirement scheme launched by the Government of India in 2004. It allows individuals to invest in a mix of equity, corporate bonds, and government securities, depending on their risk appetite.

The scheme provides tax benefits and offers market-linked returns, making it an attractive option for wealth creation. The contributions made towards the scheme are locked in until the investor reaches the age of 60, ensuring long-term savings.

10. Pradhan Mantri Vaya Vandana Yojana (PMVVY)

Finally, we have PMVVY for long-term investment options in India, the Pradhan Mantri Vaya Vandana Yojana (PMVVY) is an excellent choice.

PMVVY is a government-backed pension scheme that guarantees fixed returns for a ten-year period. This scheme is designed to provide financial security to senior citizens by providing them with regular income.

The scheme offers an attractive interest rate of 7.4% per annum, payable monthly. It also allows policyholders to receive a loan of up to 75% of the purchase price after three years.

Conclusion

In conclusion, long-term investment plans in India offer numerous benefits for those seeking to create wealth. By investing in stocks, mutual funds, or real estate, investors can enjoy high returns over a longer period of time.

Stock market investments have historically been shown to provide high returns, while mutual funds offer diversification and are suitable for those who are risk-averse. Real estate investments can also yield significant profits over the long run.

However, before making any investment decisions, it’s crucial to consult with a financial advisor who can provide personalized advice and guidance.

In 2023, it’s the perfect time to start investing for the long term in India. With so many investment options available, investors can choose the best investment plan in India with high returns to suit their needs and financial goals.