An investment is essentially an asset created to allow money to grow. This wealth can be used for a number of purposes, including the fulfilment of income shortages, retirement savings, or the fulfilment of specific obligations, such as loans reimbursement, tuition fees, or buying other properties.

Investment in two ways can produce revenue for you. One is that you can earn income by profit, if you invest in a saleable asset. Secondly, you will earn a profit by accumulating profits if you invest on a plan to generate returns. In this sense, ‘what is investment’ can be understood by saying that investments all involve turning your savings into assets or objects worth more than their first values or those that will contribute to a time-long revenue generation.

Financially, an investment represents an asset that is acquired in order to make it appreciate the value over time.


Investment is necessary because earning money is not enough in today’s world. The money you earn is hard to work for. But it may be inadequate to make your life enjoyable or achieve your dreams and objectives. In order to do this, you must also make your money hard for you. That’s why you are investing. An opportunity is missed for money sitting idle in your bank account. You should smartly invest this money to make good profit from it.


The Indian investor has many capital opportunities to choose from. Others are traditional, generational investment, while others are relatively newer, common options in recent years. Here are some of India’s common investment options.

  1. Stocks

Stocks, also known as company shares, are perhaps India’s most popular investment vehicle. You gain ownership of the company when you purchase the stock, which enables you to share in the growth of the company. Stocks are sold by publicly listed companies and can be acquired by any investor. Investments are suitable for the long term. However, investing in stocks does not mean selling, which is speculative practise, in the stock market.

2. Mutual Funds

There have been mutual funds for the past few decades, but only in the last few years have they gained prominence. Investment funds are used to pool and invest the capital of multiple investors to achieve optimal returns. Invest in various securities, different types of mutual funds. Mutual equity funds mainly invest in equity and equity-based instruments, while bonds and papers invest in debt mutual funds. Hybrid mutual funds are also open, investing in equity and debt. Mutual funds are versatile investment instruments that allow you to start and stop investment at your leisure. You can also redeem investments from mutual funds at all times, apart from saving taxable mutual funds.

3. Fixed Deposits

Investment vehicles are fixed deposits that cover a certain, predetermined period of time. They are completely secured from capital and offer assured returns. They are perfect for cautious, risk-avoiding investors. Banks provide fixed deposits for varying periods of time. Fixed deposit interest rates differ and are the sole judgement of the banks on economic terms. Typically, fixed deposits are locked in portfolios, but borrowers may often make use of loans or overdraft facilities. There is also a tax savings fixed deposit scheme, which has to provide a five-year lock-in.

4. Recurring Deposits

A recurring deposit (RD) is another fixed tenure investment that allows investors to put in a certain sum every month for a pre-defined period of time. RDs are provided by banks and post offices. In the institution that offers it, interest rates are defined. An RD allows investors to spend little in a corpus over a certain period of time per month. Capital security and assured returns are provided by RDs.

5. Public Provident Fund

The PPF is a tax-saving long-term investment vehicle that comes with a 15-year lock-in period. Tax cuts may be used for investment made in PPF. The PPF figure is calculated every fourth by the State of India. At the end of the fifteen-year cycle, the corpus withdrawn is totally tax-free. Furthermore, after such requirements have been met, PPF permits loans and partial withdrawals.

6. Employee Provident Fund

Another pension-oriented investment account that provides a tax exemption under Section 80 C is the Employee Provident Fund (EPF). The EPF deductions usually form part of an income for a month and are equal to the employer too. The removed EPF corpus shall also be fully tax-free at maturity. The government in India also implemented EPF prices by each quarter of the year.

7. National Pension System

A relatively recent tax-saving savings opportunity is the National Pension System. NPS investors remain locked up until retirement and may gain higher income than PPF or EPF because NPS provides planning options that invest in equities. It is not fully tax-free and part of the maturity corpus of the NPS must be used to procure an annuity which will give the investor a daily pension.

Given that there are so many kinds of vehicles for investment, an investor is usually confused. Anyone new to the investment isn’t going to invest their capital. Making the incorrect choice of investments will result in financial losses, which nobody wants. Therefore you should choose where to spend your money using the following factors.

8. Age

Younger investors usually have less obligations and a longer period of time. You can invest in long-term vehicles and raise your investment sum even with an increase in your salary if you have a long working life ahead of you. This is why equity-based investments such as equity mutual funds will be a better option for small investors than fixed deposits. But older investors can select safer paths such as FDs, on the other hand.

9. Goal

Both short-term or long-term, investment targets can be set. You should opt for safe investments for a short-term purpose and use the opportunity to produce returns of the shares for long-term purposes. Objectives can also be negotiable and untouched by agreements. Garantie-return investments will be a reasonable option for non-negotiable priorities such as children’s education and down payments for a home. If the target, however is negotiable and can be reversed by a few months, it can be advantageous to invest in equity funds or stocks. Further you can also reach the target before time if these investments really do well.

10. Profile

Your own profile is another thing to remember when selecting an investment option. It is also important to know what you receive and how many dependent financial institutions you have. A young investor with a lot of time on hand can not take stock-related risks if he also cares for his family. Similarly, an elderly individual without employees and a secure income stream may opt to invest in shareholdings to earn a higher return.

Therefore one size does not suit everything when it comes to investments. Investment must not only be carefully selected, but also well designed to optimise its worth.


The first step in your investment strategy is to decide the best investment for you. Here are a number of items to consider during planning:

  • Please carefully pick investments after appropriate research.
  • Don’t collapse on quick-buck schemes which in a short time promise high returns.
  • Regularly check your investments in stocks and mutual funds.
  • Take into account the tax implications of your investment returns.
  • Keep it simple and avoid the complex, nonsensical investments.