Types of Investments In India
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Every field, every department, and every aspect of life today has variety. A variety that we get to choose from. When you choose from it, there is so much you can make out of it.

One of those aspects is the environment of investing. Investing in India today does not give you limitations; there are options out there based on preference, type of financial goal, tenure, returns, costs, and so much more. Isn’t it great that you get to choose an option based on suitability and not compulsion?

Here – let us look at the various ways of investing in India. 

Before we go any further – let’s first line things straight in understanding.

What is the Meaning of Investing?

Investment is essentially a financial asset created to allow money to grow. The money gained can be used for a range of objectives such as meeting shortages in income, storing up for retirement, or completing certain particular commitments such as repayment of loans, payment of tuition fees, or acquisition of other assets.

Understanding the investment definition is critical because it can sometimes be difficult to select the right instruments to meet your financial objectives. Knowing what investment means in your own financial situation can help you make the best decisions.

You can earn money from investments in two ways. One, if you invest in a tradable asset, you may earn a profit. Second – if you invest in a return-generating scheme, you will earn an income through the accumulation of gains. In this view, ‘what is an investment might be defined as putting your savings in the assets or the objects that would become worth more than their initial value or that will assist provide an income over time.

An investment definition in finance is an asset bought with the goal of enabling it to shoot up in value over time. Investments – in general, fall into one of three fundamental groups, as outlined below.

Now, it is time we look at some of the best investment options.

The Various Choices of Investments in India

The list is big, but remember, each type of investment is suitable for different kinds of investors:

a) The Share Market – Stocks (For Investors with a High-Risk Appetite)

An equity investment is one that is made in stocks. Purchasing stocks or shares allow investors to own a portion of a company. Investors buy stocks to obtain regular income in the form of dividends and capital appreciation. When stock prices climb, investors can profit by selling shares.

Stock returns are market-linked, and so considered the riskiest investment kind. This is because share prices change in response to market demand and supply and market sentiment. Positive sentiment will cause the market to unexpectedly soar, while a pessimistic attitude would cause share prices to fall.

Investing in the share market must be done over a long time. The market would fluctuate in a short time, which may result in unanticipated losses. Investors have to be patient while they invest in inequities.

b) The Mutual Fund environment (For Investors Who Do Not Have the Risk Appetite for Stocks)

Mutual funds are financial entities that aggregate investor cash to invest in assets such as stock and debt. A mutual fund deliberately invests in stocks, government bonds, corporate bonds, and other assets. The mutual fund scheme is managed and controlled by a portfolio manager or fund manager appointed by the fund house.

Every mutual fund has an investing objective that guides the fund’s investments. Mutual funds can be classified into numerous types based on their assets. For example, equity, debt, and hybrid funds are three types of mutual funds based on the asset class. 

Similarly, funds can be classified according to their strategy, structure, and investment options. There are other mutual funds that give tax benefits. These are known as Equity Linked Savings Schemes. ELSS funds, for example. Investment in these funds is deductible under Section 80C of the Income Tax Act of 1961.

c) Gold (For the Investors who Do Not Have a Risk Appetite)

Gold has always been the go-to asset or investment for Indians. It is also a valuable emotional and social asset. Purchasing gold coins, bars, biscuits, and jewelry on auspicious days has long been a ritual in India. An asset with such sentimental worth has also gained popularity in many forms. Gold bonds and gold ETFs, for example, have recently gained popularity.

d) Bank Investments (For Investors with No Risk Appetite at All)

Fixed deposits, recurring deposits, PFFs, NPS, and more are some kinds of investments associated with the Reserve Bank of India. They could have opted with the investors who are not willing to take any risks or lose any money. This kind of investment is when the returns from the institution are always guaranteed, and no external factor will ever affect the returns from it. 

e) Real Estate (For Investors Who Want to Invest Big with Market Linked Risks)

Investing in real estate entails purchasing, owning, and managing physical property. In other words, real estate investment includes any investment in land, building, plant, property, and so on. The primary goal of real estate investors is to sell the asset at a higher price in the future or to produce consistent income through rent.

Real estate investing is the most suitable for investors with a long-term investment horizon. Land and property prices do not fluctuate significantly in the short term.

As a result, long-term investors should consider investing in real estate. Before you invest in the real estate environment, investors need to be prudent and do proper market price research and get the seller’s papers authenticated by legal experts.

This is just an overview – when you look a little more in-depth at each of these categories, your choices will only get higher.


Investment type will always be based on the kind of money you have, how much time you have, and several other factors. But, just remember one thing – you will never be left short of options.

Also read | How to Create a Crypto Portfolio?

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