What are the Different Types of Investment Plans for a Beginner

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Different Types of Investment Plans for a Beginner

While our hard-earned income can help us immensely, it may not assist us in dealing with different expenses. Along with this, our expenses and the rising inflation rate may heavily impact our financial stability. A suitable way to achieve financial stability is by opting for a money investment plan.

You can allocate your funds towards different avenues to build wealth and earn additional benefits with investments. If you’re new to investments, certain investment instruments may be optimal choices for you. Plans such as the National Pension Scheme (NPS), savings insurance policies, Public Provident Fund (PPF), etc. will help us protect our hard-earned funds.

Different Types of Investment Plans for Beginners

Given below are some investment options for beginners:

1. National Pension Scheme (NPS)

The NPS is a scheme launched by the Government of India is a government-backed scheme that will help you build wealth even after you have retired. The NPS plan is available for individuals between 18 and 60 years of age.

It is one of the best low-cost and high-return investment plans. So you can begin preparing for your golden years with the NPS policy. Along with this, they are also optimal choices for receiving tax benefits.

2. Public Provident Fund (PPF)

The PPF is a long-term investment option that offers you an attractive interest rate and reasonable returns on the amount invested. The interest and returns you earn through the policy are exempted from taxation.

Like NPS, they are government-backed schemes and aren’t affected by the volatility in the market. Since the returns from the PPF account are fixed, they are optimal choices if you’re looking to diversify your investment portfolio. In addition, they are optimal choices for low-risk investors.

3. Mutual Fund SIPs

Systematic Investment Plans (SIPs) in mutual funds are methods to begin your mutual fund investment. With SIP investments, you will have to allocate a fixed amount towards your mutual fund investment at regular intervals. You get the option to opt for a monthly, quarterly, semi-annual, or annual plan.

The investment amount is used to buy mutual fund units. After the investment, you will be allotted the units based on your investment amount. You can select from types of mutual funds to opt for a suitable plan. They are optimal choices for building wealth with small regular investments. Along with this, they also help you benefit from the power of compounding. With compounding, you can earn interest on interest. When you hold a mutual fund SIP investment for a long tenure, compounding can help you maximize your returns exponentially.

4. Savings Insurance Plan

A savings insurance plan is an insurance policy that offers you the benefit of a savings scheme. You get the dual benefit of insurance coverage and wealth creation under a single plan with a savings plan.

There are several types of money savings plans available in the market. For example, you can opt for a plan that offers you market-linked returns if you’re a high-risk investor or a plan that offers you guaranteed returns if you’re a low-risk investor.

Most insurers like Tata AIA also offer savings plans with different features. For instance, with the Tata AIA insurance plan, you can avail of a loan against the policy to take care of different financial emergencies.

Conclusion

If you’re a beginner at investing, you must begin looking for a savings scheme. You must primarily analyze your risk profile and look through the different options that match your risk profile. Opting for well-structured plans like savings plans, PPF, SIPs, etc., will help you ensure you get to build guaranteed returns through your investment in the policy.

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