While women are rooting their identity from home to large entities for a progressive career, the government and banks are supporting them to contribute to the economy. With the increase in better jobs perspective, more women are achieving financial independence.
As per the survey conducted by Groww and published by economic times, 82% of women prefer to invest in mutual funds and shares. Changing mindsets has prompted women to save and invest wisely.
In India, several investment schemes offer lucrative returns to women investors in the long term. Diving into attractive financial opportunities, the investors secure and strategize their post-investment plans.
Table of Contents
Best Investment Plans in India
1. PPF (Public Provident Fund)
PPF is an investment plan offered by the Indian government and available in banks and post offices. With an investment tenure of 15 years, it provides an interest rate of 7.1% which is a reliable option to secure your investment. The maximum investment amount per investor in a year is Rs. 1.5 lakhs.
The interest earnings and maturity amount in PPFs are exempted from taxation. If the investment tenure exceeds 3 years then from the 3rd to 6th year of investment, the investor is eligible to avail the benefits of a 25% loan of the amount. The applicable loans will be taxed at 2% more than the current interest rates.
2. NPS (National Pension Scheme)
To make significant contributions for post-retirement days, the National Pension Scheme secures the future of the investors. It generates consistent income. NPS is economical and portable and offers triple tax benefits. Individuals falling in the age bracket from 18-70 years can start investing in NPS and can evaluate the matured amount using the NPS calculator. It offers tax-free benefits at an amount up to Rs. 1.5 lakhs under section 80C and additional tax deduction benefit up to Rs. 50,000 under section 80U.
Depending on the bank’s policy, the interest rates differ and so does the profitability.
3. NSC (National Savings Certificate)
For women in India, NSC is also a great investment opportunity with an interest rate of up to 6.8%. Being an initiative scheme of the government of India, women can open their accounts in post offices. It is a fixed income and low-risk investment scheme. Government revises the interest rates every year as per market fluctuations.
You can claim an amount up to Rs. 1.5 lakhs under section 80C. Investment can be started from Rs.1000 or in multiples of 100 and increase the amount eventually. The deposits in NSC are matured after 5 years of investment.
4. EPF (Employees’ Provident Fund)
Under an EPF scheme, employees and employers contribute an equal amount. EPF is a great investment that can be used to secure post-retirement time for individuals. Women employees have the privilege to deposit amounts at a reduced rate of 8 % for 3 initial years of investment. However, the government continues to contribute 12% for women.
Women employed in the private and government sector can deposit a maximum of Rs. 2.5 lakhs and Rs. 5 lakhs in a year respectively with no tax deduction. Even the interest profitability and cumulative maturity amount is exempted from taxes.
5. Post-Office Monthly Investment Scheme (POMIS)
POMIS is a great investment scheme to generate consistent income for investors. POMIS allows deposits from 1-5 years. Women can start investing at an amount as low as Rs.1500. The maximum investment is capped at Rs. 4.5 lakhs for individual investors. Contrarily, for joint account holders, the upper limit extends up to Rs. 9 lakhs at an interest rate of 6.6% annually paid every month.
6. Fixed Deposits
Fixed deposit is the safest investment option with assured returns. Immuned from market fluctuations, the investors know the maturity amount at the beginning of the FD investments. But the profits from the FD interests are vulnerable to uncertainties in the economy.
Tenure of 3-5 years is considered to be the best limit for fixed deposits. However, the FD tenure starts from 7 days to 10 years. Usually, senior citizens get a higher ROI (Return on Investment) on FDs than the citizens below 60 years.
7. Real Estate
Investment in real estate is considered to be the safest long-term investment. Some states allow 1-2% compensation on stamp duty in real estate investments to women. Female borrowers are leveraging on preferential 0.25% on home loans.
Alternatively, if you’re thinking of buying overseas, then investing in UK property may be the way to go. According to RWInvest, the recent market boom has made property a hot item for foreign and at-home investors alike. Boasting some of the highest growth on record – in the last fifteen years at least – property prices are soaring at the moment – in part due to the aftermath of Covid-19 and the subsequent enforcement of lockdown procedures. The UK is also expected to see a 13.1% rise in property prices by 2026- with the Northwest and Yorkshire, in particular, expected to see an 18.8% rise in prices.
All in all, whichever method you take, real estate is almost certainly a reliable way of generating passive income.
Sometimes, gold prices surge up amidst uncertainties in the market. Investing in gold in varying sizes is a lucrative option for investment. Gold Exchange Traded Funds (Gold ETFs) are a type of mutual funds scheme. Being a low-risk investment, gold ETFs are cost-effective and are subject to long-term capital gain tax.
9. Post Office Term Deposit (POTD)
Post office deposits facilitate four tenure options from 1-5 years for investments. The deposit amount starts from Rs.1000 that has no upper limit. The investors earn a return of 6.7% for 5 years.
For the risk appetite from low to moderate, women investors are eligible to open accounts in post offices which are transferable if needed.
After 6 months of starting the investment, the deposits are enabled for premature withdrawal with applicable penalties of 1%. The interest is calculated based on the terms of the post office savings account.
10. Mutual Funds
Mutual funds are market-linked investment schemes. For the investors employed and earning handsome amounts, the SIP (Systematic Investment Plan) is a favorable investment option. Mutual funds bestow easy liquidity. Investors have to pay annual fees which are referred to as expense ratios thereby affecting the overall returns of the investments. In SIPs, large-cap equities get a return rate of 12-18% which varies in mid-cap equities with a return rate of 14-17% p.a.
Women are no longer struggling to manage their financial stability. With ample job opportunities and attractive interests in investment plans, the banks have observed more engagement in such schemes. Depending on pocket-friendliness, one can invest in multiple schemes to yield higher profits.