When you have an amount such as Rs. 10,000 to invest, the first thing you should do is weigh the different investment options available. For this, it’s helpful to look at the return on investment, which is a measure of performance of the investment. Return on investment compares the profitability or gains of the investment against its cost. A high return investment means that the ROI is higher than the normal amount of return which is usually generated by an investment over some time.
So, if you have Rs. 10,000 and are wondering, what can I do with this Rs 10,000 or how can I invest my Rs 10,000 to get high returns, let us get right to it.
There are several options for investing Rs. 10,000 or more in India for getting high returns. Some of the popular options that provide higher returns on investment are mutual funds, shares, NPS, gold, ETF, bonds, etc.
Among these options, the one investment that has consistently outperformed the other investment options is investment in stock markets. However, the other options mentioned above also provide high ROI as compared to other investment options like a Fixed Deposit (FD).
Let us understand these investment options:
- Mutual funds: The corpus of a mutual fund is managed by portfolio managers or fund managers who are investment professionals. There are several benefits of mutual fund investments such as high ROI, portfolio diversification, expertise of professional fund managers, and tax benefits under section 80C of the Income Tax Act, 1961. One of the main benefits of investing in mutual funds is that you can start with little amounts and invest regularly through the Systematic Investment Plan (SIP) option.
- Stock market: It is a collection of exchanges and markets where regular activities like selling and buying takes place. Different financial instruments such as shares, bonds, and commodities are traded on the stock market.
- NPS: NPS (National Pension System) is a social security initiative by the central government. You can contribute regularly to a pension account under this scheme during your working life. After retirement, you can withdraw 60% of the corpus. The remaining amount will be invested in an annuity scheme to provide you regular income as a monthly pension after your retirement.
- Gold: Gold is considered to be one of the safest investments with a good ROI over long term. Gold is a universally accepted store of value and helps hedge against inflation. It’s easy to buy and sell gold and it serves as a backup in case of emergencies. Investors tend to depend on gold investments when the other assets, such as stocks, are not stable.
- ETF: ETF stands for Exchange Traded Fund. Investment in ETFs is helpful in building a diversified portfolio. It is a basket of securities which tracks a commodity, sector, index, or other assets. ETFs can be bought or sold on the stock exchange.
- Bonds: Bonds are a high security debt instrument which help balance out a portfolio from market volatility. When a company wants to raise funds from investors, instead of taking a loan from a bank, it issues bonds.
Naturally, the next question that may come to you mind may be how to invest in these options? To answer that question, you need to think about your risk appetite, financial goals, and current investment portfolio. How you choose to invest your money between these different investment options will depend on these important factors.