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Analyzing the potential of the Indian investment market in 2024 and further, new opportunities for new investors appear. It is necessary to know the right investment approaches whether you are a young man or woman just entering the world of employment or an individual who wants to increase his or her wealth. Here are the five best investment plans for beginners in India in 2024.
Additionally, for those who may need extra capital to kickstart their investment journey, securing a personal loan for salaried individuals can be an excellent option. Whether you are from Bangalore or any state, financial institutions offer tailored instant loans for students online that cater specifically to the needs of young professionals. These loans can provide the necessary funds to invest in stocks, mutual funds, or other financial instruments, helping you to maximize your returns while you build your investment portfolio.
1. SIPs in Mutual Funds: Systematic Investment Plans
SIPs in mutual funds are still one of the most successful and popular investment tools for beginners in India. SIPs let you make a fixed number of dollar investments at fixed intervals into mutual funds, thereby giving you the added benefit of Rupee cost averaging coupled with compounding.
Why SIPs are Ideal for Beginners:
- Low entry barrier: You can begin with as low as ₹500 per month
- Disciplined investing: Subtractions are a great way to develop a habit of investing consistently
How to Get Started:
- Choose a good mutual fund company (for example, SBI Mutual Fund, HDFC Mutual Fund or Axis Mutual Fund).
- Choose a fund depending on your risk tolerance and objectives (beginner: large cap, multi-cap or balanced funds.
- Complete the KYC process. You can create your SIP through the fund house’s website or any other mutual fund website.
2. Public Provident Fund (PPF)
PPF is a long-term saving scheme that is safe, tax-exempt, and gives reasonable returns as it is supported by the government. It stays a perfect option for conservative newcomers who wish to make a stable profit in 2024.
Benefits of PPF:
- Guaranteed returns: Interest rates are set by the government (current rate is 7.1% per annum as at 2024).
- Tax benefits: Contributions made to this cause are tax exempted under section 80C of the Indian Income Tax Act.
How to Invest:
- Invest in a PPF account at the post office or some of the banks like SBI, ICICI, HDFC, etc.
- Invest at least ₹500 each year and not more than ₹1,50,000
- Contribute as often as possible to benefit fully.
3. Low-cost Index Funds
Bourses have opened up and exchange-traded funds (ETFs) have gained ground in the Indian context and index funds are one of the simplest forms of investing in the stock market without having to choose individual securities. Such funds are meant to replicate the performance of a specific market index as good as Nifty 50 or Sensex.
Advantages for Beginners:
- Cheaper than actively managed funds
- Broad market exposure.
Getting Started with Index Funds:
- Choose a good fund house that operates with index funds (for example, UTI, HDFC, ICICI Prudential).
- You definitely want to select an index fund that tracks a broad-based market index, say, Nifty fifty or BSE Sensex.
- You can invest through SIP or any lump sum of your choice.
4. National Pension System (NPS)
The National Pension System (NPS) is an officially regulated retirement saving plan that has recently gained popularity among young investors. In 2024, it will provide a reasonable proportion of equity and debt securities with extra tax advantages.
Why NPS is Worth Considering:
- Additional tax benefits: ₹ 50,000 deduction under Section 80CCD(1B) over and above the limit provided under Section 80C
- Flexible asset allocation: Choose your preferred option, such as equity, corporate bonds, or government securities.
How to Invest in NPS:
- You can open an NPS account with a bank, post office or online.
- Choose your preferred portfolio.
- It is advisable to pay every month through a salary deduction or to give a standing order.
5. Stock Systematic Investment Plans or Stock SIPs as Direct Equity Investments.
For those who are willing to take more risks in order to get more returns, direct equity investment through Stock SIPs can be an interesting proposition. This strategy enables you to invest systematically in particular stocks in the same way as mutual fund SIPs.
Benefits of Stock SIPs:
- Acquire good quality stocks in the long run
- Take advantage of cost averaging in rupees
- Start with small amounts
- Know about stock markets and company analysis
How to Implement Stock SIPs:
- Register yourself with a reliable broker for opening a demat and trading account (Zerodha, ICICI Direct, HDFC Securities etc.)
- Select 5-10 large-cap companies across industries.
- Invest in each of the selected stocks through monthly or quarterly SIPs.
- Ensure that you check and adjust your portfolio as often as possible.
Conclusion
It is important to always diversify. Diversify your investments across different classes of assets to minimize risk. Use small amounts of money to invest and be constant in your investments, and use more money to invest once you are comfortable with the business and once your earnings increase. Finally, keep on learning more about personal finance and investment. If you are unable to gather enough funds for an emergency even after all your efforts, you can avail yourself of instant loans online.
