Money talk: The best avenue for Investments

With India back on the radar of every major global investor, it’s time for you to reassess your  investment portfolio amid renewed optimism. Let’s try to find out which investment product can give you
better returns.

Everyone wants to invest money in such a way that it offers maximum possibility of growth with minimal risk. While there is no one clear indicator to find out best investment product, diversification remains the key to achieve better chances of good returns. Investing in India in 2014 has had its fair share of ups and downs. Various sectors are now buzzing with activity after announcements in the Union Budget about possible reform measures. Let us look at top five sectors for wealth creation that must be a part of your investment plan.

Equity Markets

With the formation of the NDA government at the Centre, the equity markets have been buzzing with a lot of activity. The amount of investments received from foreign institutional investors (FIIs) has gone up multifold in recent weeks. With the government announcing specialised plans for various
sectors, including manufacturing, e-commerce, automobiles, FMCG and pharmaceuticals, the stock markets are moving forward with a positive impetus. As a long-term prospect, India’s growth story remains intact and the stock markets offer a wonderful opportunity for the investor to create a wealth creation asset in the medium- to long-term. The retail investors are smiling their way back to the stock markets after the uncertainty in the previous months.

Bank Fixed Deposits

Bank fixed deposits have once again got back their sheen due to falling inflation. A low inflation environment makes bank fixed deposits a good investment option in view of the assured returns. Irrespective of the quantum of investment, every investor keeps some money in bank fixed deposits. The safety of assured returns makes it a very lucrative investment option. With the government going is all out to control inflation and the RBI monitoring the situation with its unchanged repo rates for now, fixed deposits are attracting substantial investor interest.

Public Provident Fund scheme

Public Provident Fund, one of the most popular tax-saving instruments in the market, received a shot in the arm as the finance minister increased the upper limit to '1.5 lakh from the current level of Rs 1 lakh. Since all investments into the PPF are eligible for tax deduction under Section 80C of the Income-Tax Act with tax-free interest and wit-hdrawals, PPF has emerged as the season’s favourite investment vehicle.

Real Estate and Realty  Trusts

The introduction of real estate investment trusts (REITs) is one of the highlights of this year’s annual budget. With the government announcing that emphasis would be on affordable housing and plans for development of 100 new smart cities, the investment in the real estate and infrastructure sectors has been on the upswing. Real estate companies that have been hard-pressed for cash are using REITs to raise funds, which allow investors to be part of the growth in the real estate and infrastructure sectors.

Life Insurance

With the finance minister’s announcement of an increase in the composite FDI cap in the insurance sector from 26 to 49 per cent, offering full management control, the insurance sector is buzzing with positive sentiment. The insurance sector is likely to shed its sluggish past and move forward with greater vigour as it witnesses an increase in capital from foreign investment. The arrival of new insurance companies and products is also likely to benefit the consumer, offering multiple options both for protective cover as well as wealth creation.