Best Ways To Invest 1 Lakh in Business and Investment For Good Returns
Are you having 1 Lakh in your pocket or account as free money, and you don’t know where to drop it so it doesn’t stay idle? Do you know that you can invest that amount of money into many investment vehicles?
SEE: Double 10k Quickly
Nowadays, people say they have 1 Lakh for investment and want it to yield good returns quickly; there are many ways to invest 1 Lakh for good returns.
Here are the best ways to invest 1 Lakh for good returns:
How To Invest 1 Lakh in India
1. Balance Fund
A balanced fund is the best way to invest your 1 Lakh for good returns. This type of investment is for those looking for moderate returns and safety.
This investment follows the principle of balancing, so they divide the fund and invest in equity and debt; therefore, you will enjoy the benefits of the two.
This investment is aimed at investors looking for income, capital appreciation, and safety, and it has a fixed minimum and maximum invested amount must remain.
2. Multi-cap Mutual Fund
Investing in a mutual fund is risky and unsuitable for everyone, but if your risk appetite can take you, you can invest in this fund. You should expect a 12 to 17% return from the funds.
Mutual funds are diversified and can be invested in stocks across market capitalization.
The top multi-cap diversified funds are Franklin India High Growth Companies Fund, ICICI Prudential Exports Other Services Fund, Kotak Select Focus Fund, Mirae Asset India Opportunities Fund, UIT MNC Fund, Tata Ethical Fund, and Principal Growth Fund.
3. Equity Linked Savings Scheme (ELSS)
Investing in ELSS will give you good returns and double your money in 6 to 7 years; it is risky because of its direct link to the stock market.
So it’s your choice, but looking at it from India’s past data and future economy, we can say the country has a stable government. Therefore, you can invest in it, and with time, you invest in equities.
Investing in balanced mutual and debt funds will reduce the risks.
4. Public Provident Fund (PPF)
This is mainly for those who want a safe investment with low risk. PPF was introduced in India in 1968 by the National Savings Institute under the Ministry of Finance.
This investment is entirely ensured by the Central Government and is implied to activate little funds through offering ventures with sensible returns consolidated with wage tax cuts.
To contribute, you must open an account under Open Provident Fund.
5. Direct Equity
Another best way to invest 1 Lakh is by investing in Direct Equity for those ready to take high risks. It is risky and rewarding, so you can weigh the risk and the reward and decide if you will go on with the investment.
This investment provides capital funding in exchange for an equity interest without you purchasing the regular share of a company’s stock. Those who can balance risk and reward while dealing with the investment are lucky.
Direct equity is risky because of the complexity of decoding information, which is the most important aspect of direct equity.
Decoding information in equity is complex because information relating to equity is only contained in companies’ financial reports, such as balance sheets.
You must be able to decode information before you invest in direct equity to avoid loss.
6. Bank Fixed Deposit
Bank fixed deposit is a good investment since it is rare for banks to fail in India, you will not lose your money, and there is no hidden cost since rates are upfront.
What you decide to do with the 1 Lakh depends on several factors like your risk appetite type of risks you can take, and how long you want to invest; that is, the time frame.
We have different senses when taking risks; some don’t even want to take any chances.
You shouldn’t spend the entire 1 Lakh on only one investment; you can share it and use it for two or three investments.
For someone who wants to be safe and does not want to take any risk, you can invest in Bank FDR, Corporate Bonds, FMP, and Debt Mutual Funds. Invest in Equity Mutual Funds and Arbitrage funds for those that can take minimum risk.
And for those that can high risks, invest in new IPOs through Direct Equity.
You must have full knowledge of investment before you start investing; many people make the mistake of investing without knowing essential details like the return the investment will yield.