10 Best Long Term Investment Plans In India 

Long-term investment plans are known to outperform short-term ones. However, irrespective of market conditions, investors need to plan properly and stay invested to reap the benefits in the long run. Investors must also stay aligned with financial goals to make informed choices while investing. 

If you are interested in understanding and investing in long-term investment plans, then here is a list for you. Read on!

What is a Long-Term Investment Plan?

A long-term investment plan is an investment that’s held for a year or more. These investments are beneficial for future needs like a child’s education, marriage or creating a retirement corpus. Moreover, long-term investment plans help create financial discipline to achieve one’s financial goals. 

Overall, these plans help accumulate wealth for the future and maximise them as well. However, one needs to assess their financial requirements and risk profile before choosing a long-term investment plan. 

Benefits of a Long-Term Investment Plan

Individuals who invest their money in long-term plans have a lot of time to try out various funds. They can even switch between funds to make up for non-performing funds. Here’s a list of all the benefits of long-term investment plans:

• Power of compounding- The more time one gives their investments to grow, the higher their returns. For example, if an individual invested Rs 500 monthly at a 15% rate, it will increase to Rs.16.42 lakh in 25 years. 
• Security- In long-term investments, people suffer less from market fluctuations. Moreover, nobody can fully predict market conditions; as a result, it is good to invest long-term to maximise profits. One can also overcome short-term volatility. 
• Goal-centric planning- When one invests in long-term plans, they can systematically strategise for significant goals like purchasing a house, child’s education, marriage, retirement, etc.  
• Tax benefits- Long-term investment plans make it easier for investors to plan their taxes. Moreover, they can avail of tax benefits as per the Income Tax Act, 1961.
• Convenience- Investors do not need to worry about premium due dates. They need to talk to the bank and allow standing instructions to auto-debit the money from one’s account during each premium paying due date.

10 Best Long-Term Investment Plans in India

Here is a list of a few of the best long-term investment plans in India giving high returns:

1. Bank Fixed Deposits (FD)

Fixed Deposits (FDs) are the most traditional form of investing money in India. Individuals can invest their money in FDs for 3, 5 or even 10 years with a return rate ranging between 3%-6.5% per annum. Once the term ends, the investor can withdraw the money. They also withdraw some savings early; however, the bank will levy a small penalty. Moreover, the fixed deposit interest rates are higher than RD and savings accounts. 

2. Mutual Funds

Mutual funds are becoming a popular investment option these days. They are safe to invest in as SEBI (Securities and Exchange Board of India) regulates the mutual funds market. There are three categories of mutual funds – debt, equity, and hybrid funds. The debt funds invest money in corporate bonds and government securities. This is perfect for risk-averse investors.

On the other hand, an equity fund invests money in stocks and offers capital appreciation to the investors. Since the returns are linked to stock markets, it is riskier than debt funds, but the returns are also high. On the other hand, hybrid funds are a mix of debt and equity funds, which is why they are popular among investors. 

3. ULIP (Unit Linked Insurance Plan)

ULIP (Unit Linked Insurance Plan) is useful in fulfilling various financial goals like building a retirement corpus or paying a down payment. Further, under section 80C and section 10(D), one can claim a maximum deduction of Rs 1.5 lakhs. ULIP plans have a minimum lock-in period of 5 years but have a higher risk involved than equity funds.

4. Public Provident Funds (PPF)

This scheme is very similar to Employees Provident Funds (EPF) which only salaried individuals receive from their employer. However, anybody can open a PPF account in banks or post offices. These are held for 15 years, and the current interest rate is 7.1% per annum. The Government of India fixes these rates of interest every year. It also allows individuals to claim tax deductions under Section 80C of the Income Tax Act. 

5. National Savings Certificates (NSC)

National Savings Certificates (NSC) is a secured long-term investment option in India available in post offices and specific public sector banks. Investment tenure for this scheme is 5 years, and one can start saving with as low as Rs 100. The current government fixed interest rate is 6.8 % per annum. 

6. Sukanya Samriddhi Account (SSA)

The Government of India introduced Sukanya Samriddhi Account (SSA) to benefit a girl child. In one financial year, an investor can deposit up to Rs 1,000 in a financial year till the girl child turns 14. Moreover, an investor can withdraw the amount after 21 years when the account reaches maturity. GOI offers a 7.6% rate of interest for tax deduction claims. 

7. Real Estate 

Investing in real estate is typically long-term in nature. However, this form of investment takes a good amount of money to get started, and the commission is also quite high. In this case, the returns are high when the individual holds the property for a very long period. 

This is popular as one can take a loan from the bank and then pay the mortgage by keeping the asset on rent. Later, when the property prices increase exponentially, they can sell the property at a higher price than the one they originally bought. 

However, there are some risks attached, like the price of the property can decrease with time instead of increasing and then the investor will be at a loss. 

8. Gold

Investing in gold is a popular long-term investment option for Indians. Investors can invest in gold in form of Gold coins, Gold Bars, Gold ETFs, gold deposit schemes, mutual funds, and much more. These bonds have a lock-in period of 3-7 years and a tariff-free interest rate of 4% per annum. 

9. National Pension System (NPS)

The government of India introduced the National Pension Scheme (NPS) as a form of long-term investment plan in India. This scheme ensures people a regular income post-retirement. One can invest in this scheme up till the age of 60. After reaching 60 years of age minimum of 40% of the funds will be used to buy annuity plans to provide regular income to investors. Investors can withdraw the remaining 60% as a corpus amount. 

10. Corporate Fixed Deposits 

They are riskier than bank fixed deposits, but the interest rates are also high. Interest rates range from 6%-8% per annum. In this case, the corporates collect funds for operational activities and expansions. 

Also Read: How To Calculate Your Investment Returns With Mutual Fund Returns Calculator

How To Plan a long-term Investment?

Individuals can plan their long-term investments based on their income, goals, and expected return. For example, if an investor is 35 and is planning to save for retirement, then one has approximately 25 years to build one’s fund before retirement. However, if the person has other additional goals like funding a child’s higher education and marriage, one should plan accordingly. 

Things to Consider Before Investing 

When it comes to investing your money, there are a lot of things to consider before making any decisions. 

Before you invest, here are some things to think about:

Objectives: What are your investment goals? Do you want to build your business over time or make quick money? Knowing your goals will help you make significant investment selections. 

Your Risk Tolerance: Are you ready to take a calculated risk? Investing in something with a significant potential return usually entails a higher level of risk. If you are not comfortable taking on many risks, you may want to focus on investments with lower potential returns but are also less volatile.

Your Investment Time Horizon: How long do you intend to invest? If you invest in the long term, you may be able to take more risks. However, if you want to generate income in the short term, you will want to focus on less volatile investments.

Your Investment Vehicle: There are a variety of investment vehicles available, from stocks and bonds to mutual funds and ETFs. 

Also Read: Post Office Investment Calculator: What Is It And How Does It Work?

Final Word

Investing in a long-term investment plan could help accumulate wealth over a long period of time. However, before you start investing, consult with a financial expert and analyse the return on investment. If you want to invest, visit Navi Mutual Fund and get started today!

*Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

FAQs on Long-Term Investment Plan

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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.