30 MONEY GROWING IDEAS FOR RESIDENT INDIVIDUALS IN INDIA

 Before I start on this topic, below are some disclaimers and caveats (the proverbial “fine print” 😊):

1)  The views and contents of this article are purely based on acquired knowledge through my own investments in some of these options and study of various third-party sources available in the public domain

2)     I am NOT, and DO NOT, claim to be an expert in this space!

3)    These 30 options may not be an exhaustive list and there can be other investment options available too

4)  Some points may not be fully accurate and up-to-date, and for any doubts readers should check authentic/official sources

5)  Anyone considering to invest in these options should do their own homework / consult their investment advisors, and will be making these investments at their own risk!

Bank Savings Accounts, Fixed Deposits, Post Office Savings, Gold, Real Estate, Provident Fund, etc. are the most common and popular investments & savings instruments that most Indians have been traditionally aware of and practise. The primary investment philosophy has been safety/security and liquidity, without bothering too much on growth and risk-return aspects.

In the recent few decades, the Indian economy has developed by leaps and bounds with the middle- & upper-class size of the population and disposable incomes also growing significantly. Quite a few from this segment started looking beyond the aforesaid traditional investment vehicles and became willing to take more risk (let’s say calculated or educated risk) for higher returns. Two other investment avenues henceforth became mainstream - Equities & Mutual Funds.

Each of these is a subject matter by itself. Equity/Stock market brings in elements like long-term investment, stock trading, large cap/small cap/multi-bagger stocks, SIPs, the bulls & the bears, complex instruments like Futures & Options (F&O), etc. etc. Mutual Funds have variations like Equity funds, Debt funds, Balanced funds, Hybrid funds, Flexi Funds, Value Funds, Index Funds, ETFs, International Funds, ELSS, Large Cap/Mid Cap/Small Cap, SIPs, STPs, SWPs, etc. etc.

Further, for more mature & financially literate investors with higher investment & risk-taking ability and/or backed by their investment advisors, other Alternate Investment avenues have also opened up. These are however complex in nature and risk-return profiles are also significantly different.

Below is the compilation of 30 money making ideas (to be read in conjunction with the aforesaid caveats).

30 MONEY GROWING OPTIONS FOR RESIDENT INDIVIDUALS IN INDIA
Sl. No.	FINANCIAL INSTRUMENT	Type	Growth Potential	Risk	Liquidity	Taxation
1	Bank/Post Office Savings Accounts	Investment	Very Low Interest	Medium, depends on Bank type	High	As Per Tax slab
2	Bank/Post Office Fixed Deposits (FDs) & Recurring Deposits (RDs)	Investment	Low Interest	Medium, depends on Bank type	Low; pre-mature withdrawal with loss of interest	As Per Tax slab; 5 year+ FDs get Sec 80C coverage
3	Corporate FDs & Non-Convertible Debentures (NCDs)	Investment	Higher than Bank FDs	High (depends of corporate type)	Low	As Per Tax slab
4	GOI Securities (T-Bills, G-Secs, Floating Rate Bonds, etc.)	Investment	Higher than Bank FDs	Very Low	Low	As Per Tax slab
5	Corporate Bonds	Investment	Higher than Bank FDs	Medium, depends on corporate type	Low	As Per Tax slab; Unless they are tax-free bonds
6	Employee Provident Fund (EPF)	Retirement	Highest amongst GOI schemes (Govt decided)	Very Low	Low; early withdrawals after 5 years of continuous service on special cases	Tax free; EEE up to 2.5 lakhs total contribution/year
7	Voluntary Provident Fund (VPF)	Retirement	Same as PF	Same as PF	Same as PF	Included as part of PF
8	Public Provident Fund (PPF)	Retirement; 1.5 lakhs/year	High (Govt decided, but less than PF)	Very Low	Low; conditional early withdrawal	Tax free (EEE)
9	National Pension System	Retirement	High (Market-linked)	Medium	Low; conditional early withdrawal	60% corpus tax free on maturity; balance 40% annuity to be purchased & taxable
10	Senior Citizen Savings Scheme	Retirement; up to 15 lakhs	High (Govt decided)	Low	Medium	Sec 80C coverage
11	Pradhan Mantri Vyaya Vandana Yojana (PMVVY)	Retirement; up to 15 lakhs	Medium (Govt decided)	Low	Medium (monthly pension)	As Per Tax slab
12	Term/Annuity Plans (e.g., LIC Saral Pension)	Retirement	Medium	Low	Medium (monthly pension)	As Per Tax slab
13	Post Office Monthly Income Scheme (MIS)	Investment; up to 4.5 lakhs	Medium (Govt decided)	Low	Medium (monthly interests)	As Per Tax slab
14	Post Office Kisan Vikas Patra (KVP)	Investment	Medium (Govt decided)	Low	Low; conditional early withdrawal	As Per Tax slab
15	Post Office National Savings Certificates (NSCs)	Investment	Medium (Govt decided)	Low	Low; conditional early withdrawal	As Per Tax slab
16	Sukanya Samriddhi Scheme	Investment	Medium (Govt decided)	Low	Low; conditional early withdrawal	As Per Tax slab
17	Unit Linked Insurance Plans (ULIPs)	Investment-cum-Insurance	High (Market-linked)	Low	Low; conditional early withdrawal	Sec 80 C coverage & Maturity tax free if annual premium less than 2.5 lakhs/year
18	Direct Equities (Stocks)	Investment	Very High + Dividends	Very High	High	LTCG @20% if held more than 1 year (above 1 lakh/year) & STCG (as per tax slab)
19	Mutual Funds (MFs)	Investment	Very High	High (depends on MF category & type)	High (depends on MF category & type)	LTCG & STCG (depends on MF category & type)
20	Gold - Physical	Investment	High	Medium (Storage Security)	High	As Per Tax slab
21	Gold - ETFs	Investment	High	Medium, depends on MF house	Medium	As Per Tax slab
22	RBI Sovereign Gold Bonds (SGBs)	Investment	High + Half-yearly Interests	Very Low	Low; conditional early withdrawal	Maturity tax free; Interest taxable as Per Tax slab
23	Real Estate - Physical	Investment	Very High	Medium	Medium	As Per Tax slab
24	Real Estate Investment Trusts (REITs)	Investment	Very High	Very High	Medium	As Per Tax slab
25	NBFC P2P (Peer to Peer) Lending	Investment	Very High	Very High	Monthly EMI Paybacks; 3 years lock-in	As Per Tax slab
26	Venture Capital (VC), Private Equity (PE) Funding	Investment	Very High	Very High	Low (depends on investment horizon, exit event of invested firm, etc.)	As Per Tax slab
27	Cryptocurrency (legal status unclear as of now)	Investment	Very High	Very High	Medium	As Per Tax slab
28	Currency & Commodity Hedging	Investment	Very High	Very High	High	As Per Tax slab
29	Chit Funds	Investment	Very High	Very High	High	As Per Tax slab
30	Lottery, Gaming, Horse Racing, Arts & Antiques (legal in some states)	Investment	Very High	Very High	High	As Per Tax slab

Dated: September 11, 2022

Author: Subham Sarkar (https://www.linkedin.com/in/subham-sarkar-519b7114/)

Disclaimer: The contents of this blog are purely in an individual capacity and based on the personal opinions of the author. This should not be considered as an investment advisory by any means.