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Best Investment Options for Salaried Person in 2024

As a salaried employee, one is always looking for investment options to ensure a safe and stable financial future. With so many investment plans available in the market, choosing the best plan may seem like a challenging task. ...Read More

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Best Investment Options for Salaried Person in 2024

Best Investment Options for Salaried Individuals

Best Investment Options for Salaried Individuals
August 05, 2024

Table of Content

 

List of Best Investment Options for Salaried Person

Many investment plans in India help investors create a roadmap for their financial journey. They help them decide where to invest and what should be the investment amount. There are multiple investment options for salaried employees and one needs to have a complete knowledge of each to make the best choice. Let us analyse some of the best investment plans for salaried persons:

  • National Pension Scheme

The National Pension Scheme is for those salaried employees who wish to create a retirement fund. The scheme allows them to invest their savings in a pension fund monitored by the government. The fund invests in a diversified portfolio that includes shares, government bonds and corporate debentures. The minimum investment amount for NPS is Rs 500 per month. As one of the many tax-saving options available, the NPS allows salaried persons a deduction of up to Rs 1.5 lakhs.

  • Mutual Funds

Mutual funds involve investing a sum of money in securities that are issued on a monthly or yearly basis by organizations for raising funds. They are one of the best equity investment for a higher in a short period.

  • Fixed Deposit

Fixed deposits are one of the best savings plan for beginners. The minimum investment amount for fixed deposits varies between Rs 1,000 to Rs 5,000, with the option of choosing a maturity period between seven days to a maximum of 10 years. Fixed deposits are low-risk investments that offer guaranteed returns with an interest rate between 6.5% to 7.5%.

  • Recurring Deposit

One of the good early career investment plans is a recurring deposit. While fixed deposits require a lump sum investment, recurring deposits allow the investor to deposit a monthly sum. The interest on the deposits is collected over the investment period and paid at the end of the tenure.

  • National Savings Certificate

A National Savings Certificate is like a five-year fixed deposit. One of the best investment options for salaried person, it offers guaranteed returns to the investor at the end of the investment tenure. With a minimum investment amount of Rs 1,000, it offers a rate of return of 7.7% per annum. Salaried employees can claim tax deductions up to Rs 1.5 lakhs.

  • Monthly Income Plans (MIPs)

Another one of the top investment strategies for salaried employees is the Monthly Income Plan. The MIS provides a source of regular monthly income that is not affected by fluctuations in the securities market. With the investment amount varying between Rs 1,000 to Rs 9 lakhs, the MIS offers guaranteed returns at 7.4% per annum. The tenure for the Monthly Income Scheme is five years. The investor can choose to extend the scheme for another five years by paying a small fee if they choose to.

  • Sovereign Gold Bonds (SGBs)

Sovereign Gold Bonds are debt instruments for secure investment that are issued by the RBI (Reserve Bank of India). SGBs are issued in multiples of grams, and the minimum investment amount is one gram of gold. With a maturity period of eight years, SGBs provide a rate of return of 2.5% every six months. In addition, sovereign gold bonds are tax-free investment instruments which them a good investment plan for salaried person.

  • Public Provident Fund (PPF)

A Public Provident Fund is a one-time investment plan for salaried person that offers a safe and secure investment option to salaried employees. With an investment tenure of 15 years, a PPF offers a minimum investment amount of Rs 500, going up to Rs 1.5 lakhs. It collects returns over the investment tenure which are then paid at maturity.

  • ULIPs (Unit Linked Insurance Plans)

ULIPs provide the best of both worlds by combining life insurance coverage with investment opportunities, making them an ideal choice for salaried individuals. This savings plan offers the benefits of insurance as well as an investment. When you pay a ULIP premium, some part of it goes toward your life insurance and the rest of the amount is invested in market funds chosen by you.

Please note that In Unit Linked Insurance Plans, the investment risks in the investment portfolio is borne by the policyholder

Key Considerations before Choosing an Investment Option in 2024

There are many factors to take into consideration while choosing the best investment options for salaried employees. Here are some of these factors:

  • Financial Goals

Before making a decision, it is crucial to carefully examine your financial goals and determine if your chosen investment, along with life insurance coverage, aligns with these objectives. Ensuring that both your investment and life insurance needs are met can provide comprehensive financial security for you and your beneficiaries.

  • Risk Profile

Conduct proper research on every investment option to clearly understand your risk tolerance before entering any investment. The best way of investing is by creating a balanced portfolio that covers high-risk as well as low-risk investments.

  • Previous Performance

Analyse the past performances of the investments you plan to undertake. For example, if you are planning to invest in mutual funds, it is advisable to compare the past returns provided with their benchmarks to understand their actual performance, and whether they are in line with your goals and risk profile.

  • Associated Expenses

Keep in mind some of the expenses associated with investments that can have an impact on your overall returns. These can include brokerage, management fees, expense ratios and exit loads.

FAQs for Investment Options for Salaried Employees

Q. Which scheme is best for a salaried person?

The best investment options for salaried person depends on the financial goals, risk tolerance and investment tenure. Investment options like Public Provident Funds and the National Pension Scheme cater to long-term goals, while mutual funds provide different risk levels.

Q. Is it OK to invest 50% of your salary?

It is always advisable to follow the 50/30/20 rule of budgeting. As per this rule, 50% of your salary is for needs and utilities like rent, bills, debt payments, etc. 30% of your salary can be spent on wants, while 20% should be saved and invested for future goals.

Q. How do you plan an investment for a salaried person?

The best investment plans for salaried person include analysing financial goals, knowing your risk tolerance, and investing tenure. It is advisable to create a diversified portfolio of high-risk and low-risk investment options. Some of these include ULIPs, PPFs, National Pension Scheme, mutual funds, etc.

Q. How to invest with a Rs. 1 lakh salary?

Follow the 50/30/20 budgeting rule and invest 20% of your salary. Create a diversified portfolio that includes tax-saving investment options like PPF and FD, create a savings fund with the help of NPS and increase your risk appetite through mutual funds.

 

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year.

Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, the name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.

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