Financial literacy is what most people are seeking for. After generating a stable revenue source, most people want to invest their savings in places where they can generate higher returns. Investors often look for high return- low risk investment options but they always fall in the trap of making quick money. People often lose money only by looking at the current market trends and not by researching and analysing the whole fundamental aspect of their investment option. Sources with low risk requires more patience and time and often generate low returns. Sources with high returns have high risks and can generate returns quickly. But the probability of losing money in these scenarios is much higher and quicker.

Currently, the market is in bull phase. Financial experts say that the market will continue to be in bull’s run for whole year. Keeping in mind some good options can help to pay extra bills.

There are 2 categories of investments – Financial investments (stocks and mutual funds) and Non-Financial investments (Gold, Property). Keeping both of them in mind, here are the 10 best investment options in 2021

EQUITY- Currently in the booming market, investing in equity is one of the best options, considering that top tier companies continuously invest in growth and are safer options for the investors. Choosing a right stock is extremely important and timing for entry and exit is highly crucial and difficult.

Investors who want to develop a good portfolio should understand the company’s future potential of growth and current financial position in order to decide the right market price to invest in their stocks. To invest in equity, you need to open a demat account and learn all the basics before start investing. Remember, diversifying your portfolio can give you good returns and assure you low losses than putting whole your money in one stock.

Moreover, equities gives higher than inflation adjusted returns and are considered a better option than any other assets.

 MUTUAL FUNDS-   Mutual funds are one of the most popular and safer options that can give good returns, (keeping a probability of always losing money in mind) it is a more suitable option for people who cannot find a right investment option for themselves. Mutual funds is a type of financial asset that is made up of collecting funds from investors to invest in stocks, bonds and other money making financial instruments. They are operated by money managers who have a good knowledge of market. Each shareholder participates in the gains and losses of the fund.

You can either opt for

EQUITY MUTUAL FUNDS, where the returns are largely dependent on manager’s ability to generate profits/returns

DEBT MUTUAL FUNDS, where the funds are directly invested in fixed interest generating securities like government bonds, treasury bills, commercial paper and many more. They are low risk and low to medium return investment options.

However, mutual investments are not risk free and won’t guarantee you returns and hence you should read the related risks before investing.

NATIONAL PENSION SYSTEM-   It is a retirement savings scheme which is designed for individuals to save systematically for their retirement age during their earning life. NPS helps to inculcate the habit of saving for your retirement and provide regular income after your earning period. NPS suits for people who are not very good with choosing right investment options and cannot invest their time on the same.

PUBLIC PROVIDENT FUND-   The PPF account or Public Provident Fund scheme is one of the most popular long-term saving-cum-investment plan due to its safety, returns and tax savings. The PPF was first offered to the public in the year 1968 by the Finance Ministry’s National Savings Institute. Major reasons why it is attractive to many people is because of its tax-free yearly interest and the annual compounding. PPF has a long tenure of 15 years or more which gives continuous interest for a given period of time that makes its impact of compounding huge, especially in the later years. It is a long term investment with no risk (if you choose the right PPF).

FIXED DEPOSITS- Commonly known as FD and bank fixed deposits, it is one of the safest and most used options available for general public. The amount of interest for the investment varies from bank to bank. People can opt for interest rate as monthly, quarterly, half yearly or yearly. The interest rate added to one’s investment and can be compounded depends on the duration of investment.

SENIOR CITIZEN’S SAVING SCHEME (SCSS) –   This scheme specially focussed the senior citizens (as the name suggests) that gives highest safety and tax savings making it a must have and popular product for over 60 year olds. The scheme offers capital protection and quarterly interest payments as a source of income. This scheme is backed by the government and thus offers proper guarantee for your investment. Interest income from SCSS can also help retirees to bridge the gap between their income and their amount of last salary

REAL ESTATE –   The location of the property is single most important factor to determine the amount of returns one can get. Currently, when the prices of property are down, it can be a good investment options for people who have plenty of financial resource to invest. One should always consider investing in future development in a particular area. The value of land increase drastically when the areas around it start to develop. But unlike other assets, real estate is highly illiquid. The other big risk is with getting the necessary regulatory approvals, which has largely been addressed after coming of the real estate regulator

GOLD –  Not referring to possessed gold in the form of jewellery as it has its own concerns such as safety and high cost. Then there’s the ‘making charges’, which typically range between 6-14 per cent of the cost of gold (and may go as high as 25 percent in case of special designs). But for those who still want to invest in gold there is still an option.  An alternate way of owning gold is via paper gold. Investment in paper gold is more cost-effective and can be done through ETF’s.

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