Best One Time Investment Plan in India

Nurturing a robust financial portfolio often calls for strategic investments, especially in dynamic markets like that of India. One-time investment plans emerge as a viable route for investors who want to steer a substantial sum into a singular, promising venture. Let’s look at the top 10 one-time investment plans in India that craft a narrative of financial prudence.

Best one time investment plan

1. Equity Funds

For those seeking growth-oriented investments in India, equity mutual funds emerge as a top pick. As of May 31, 2023, the Assets Under Management (AUM) of the Indian Mutual Fund Industry has skyrocketed to ₹ 46,37,565 crore, marking a staggering 5-fold jump over a decade. Delving into one-time investment plans, the tenure factors come into play. For mutual funds, the ideal investment period spans 5 years or more, although Equity Linked Saving Schemes (ELSS) require only 3 years. While the risk associated with equity funds is high, the returns can vary, generally ranging from 5% to 15%.

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2. Debt Funds

Debt funds primarily invest in instruments like government securities and high-grade corporate bonds, particularly those with AAA/AA ratings, making them one of the best debt-based one-time investment plans. The return on investment usually ranges from 7-13%, depending on the funds you invest in.

These funds are considerably less risky than their equity and hybrid counterparts. Top-performing debt funds not only ensure steady gains but also offer attractive returns. An important tax aspect to note is that withdrawing from these funds before 36 months results in Short-Term Capital Gain (STCG), which attracts a higher tax rate compared to Long-Term Capital Gains (LTCG). Thus, for more tax-efficient returns, it’s advisable to stay invested longer. 

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3. Liquid Funds

Liquid funds are an ideal investment avenue for those looking at a short-term horizon of 1 year or less, offering high liquidity. These funds carry minimal risk as they park money in high-rated debt assets with short maturity periods, ensuring stable returns. An added advantage is their low expense ratio, which translates to a lower cost for the investor.

One can effortlessly shift money from liquid funds to other funds as needed. If invested for over 3 years, they qualify for Long-Term Capital Gains (LTCG) tax benefits. Due to their short lending duration, up to 91 days, they represent one of the safest mutual fund categories, providing almost nil loss risk for investments held for a minimum of one month. For instance, the PGIM India Liquid Fund showcased 4.75% annualized returns over the past three years and 5.35% over the last five years, highlighting its efficiency amidst its peers.

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4. Liquid Mutual Funds to ULIPs

ULIPs offer tax advantages, providing deductions under 80C and tax-free maturity. They uniquely permit investments in both debt and liquid funds with consistent tax benefits. For optimal gains, instead of a lump-sum ULIP investment, divide funds: keep a significant portion in liquid mutual funds, invest sequentially in ULIPs, and automate withdrawals to manage premiums. This method ensures 5-year 80C deductions, ULIP’s long-term investment benefits, partial withdrawals post-5 years, and tax deferment. With plans like Invest 4G, achieve balanced, dynamic portfolio management for long-term objectives.

5. Liquid Mutual Fund to Equity Funds

For mitigated risk, use a systematic approach with equity funds, benefiting from rupee cost averaging amid volatility. Regular investors can utilize SIPs for routine equity fund investments. However, for bonus allocation, select an apt equity fund, park the bonus in a related liquid fund, and set up a systematic transfer to the equity fund. Bear in mind the minimum holding period is 12 months for standard equity funds for tax exemptions and 36 months for ELSS funds.

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6. Bonds

Bonds are fixed-income securities that represent a loan from an investor to an issuer, often a corporation or government. In return for capital, the issuer promises periodic interest payments and the return of the bond’s face value upon maturity. These are generally less risky than stocks, making them a staple in conservative portfolios. Their yield, credit rating, and maturity duration influence their appeal. While they offer stable returns and capital preservation, their yields can be impacted by interest rate fluctuations and issuer creditworthiness.

7. Real Estate Investment Trusts (REITs)

REITs are trusts that own and operate income-generating real estate, providing investors with a method to invest in lucrative properties without needing to directly purchase or manage them. REITs are often likened to mutual funds, pooling investor capital to invest in a diversified range of real estate assets. Benefits include fractional ownership with minimal investments, regular income through rent distributions, potential capital appreciation, and enhanced liquidity as they are listed and traded on stock exchanges.

8. Certificate of Deposit (CD)

A Certificate of Deposit (CD) is a fixed-term financial instrument offered by banks and credit unions, allowing individuals to invest their funds for a specified period. Unlike regular savings accounts, CDs offer a guaranteed interest rate, ensuring a predictable return on the one-time investment. In exchange for higher interest rates compared to regular savings accounts, funds in a CD are locked in until the end of the term, with early withdrawals typically incurring penalties.

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9. Government Savings Bonds

Government Savings Bonds are a secure investment option backed by the Government of India, offering a 7.75% interest rate. Popular among those seeking a steady income source, they are accessible to resident individuals and Hindu Undivided Families. While they guarantee the principal amount upon maturity, the interest earned is taxable. Investments can range from a minimum of Rs. 1,000 with no upper limit. Two interest payout options, cumulative and non-cumulative, cater to varied investor preferences. Premature redemption is available, contingent on the investor’s age, with specific lock-in periods.

10. Peer-to-Peer lending

In the innovative space of India’s investment sector, Peer to Peer lending is the best one-time investment plan with high returns. Distinct from traditional pathways, it offers an exhilarating potential of double-digit returns, ranging from 10 to even 12%, overtaking the typical stock market average of 8%. Investors with a moderate to high-risk tolerance might find this platform appealing. Embrace P2P lending with investment partners like LendenClub to tap into a network of opportunities.

Advantages of One-time Investment Plans

• Optimal Utilization: They turn idle money into growth capital, preventing wastage in low-yield accounts.
• Convenience: These plans remove the burden of regular premium payments and investment date concerns.
• Goal Alignment: With potentially strong returns, they can align with key financial milestones, like a child’s education or property acquisition.
• Enhanced Returns: Initiating lump sum investments early can harness the power of compound interest.
• Low Costs: Paying in a lump sum usually results in reduced transaction charges.
• Tax Benefits: Instruments like ELSS and ULIPs provide tax advantages, while others may offer indexation benefits for lower tax impacts.

Disadvantages of One-time Investment Plans

• Lack of Discipline: Unlike systematic investments, they lack periodic discipline, relying on sporadic lump sums.
• Potential Lower Returns: Without research, one might end up in low-return plans. Diversification becomes crucial.
• Market Risk: Investing at a market peak can lead to losses if values plummet. There’s no mid-tenure opportunity for cost averaging.
• Rigidity: They lack the adaptability to invest or withdraw based on market trends.
• Liquidity Concerns: If you anticipate needing funds shortly, one-time investments might tie up resources inconveniently.

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Factors To Consider While Selecting a One-Time Investment Plan

When considering a one-time investment plan, it’s essential to factor in a variety of elements that could influence the decision-making process:

• Market Insight: Equip yourself with a robust understanding of the investment landscape. Go through online research, read financial literature, or seek guidance from financial professionals.
• Weigh Returns Against Liquidity: Determine your investment horizon upfront. Are you inclined towards a long-term strategy or a short-term one? Grasping the potential returns and how accessible your money will be (liquidity) is pivotal.
• Exercise Patience: The investment world isn’t for the faint-hearted. Once committed to a plan, it’s imperative to remain calm, especially during market fluctuations. Instantaneous profits are rare; often, the market requires time to come full circle. If you’re seeking immediate results, this may not be the right avenue for you.
• Maximize Dormant Funds: Money that’s simply sitting in your bank account can often be seen as a missed opportunity. Leveraging these funds by investing in a well-chosen one-time plan can lead to considerable gains over time.

Get Started Right Away!

Harness the potential of India’s vibrant investment landscape by opting for a plan that aligns with your financial objectives and risk tolerance. From the security of PPF to the high-return potential of P2P lending, explore these plans to carve a path to a financially secure future.