In the fast-paced and ever-evolving world, the search for high returns and better financial opportunities gets more priority. But, just earning money is not the only way of achieving financial success.
It is all about long-term vision and smart financial planning. Everyone works hard to earn and realize their dream and goals. This is where the power of strategic investment comes in.
Having the best investment plan for 5 years not only helps to increase your wealth but also helps in securing your future. It is like having a proper roadmap for financial prosperity. To help you with your investment, here’s the best investment plan for 5 years you should know:
A brief overview of a 5-year investment plan
A 5-year investment plan is an investment strategy about how an individual invests their money for a period of 5 years to get the financial benefit out of it. The benefit includes building an emergency fund, savings for retirement and generating passive income.
The best investment plan for 5 years involves diversifying the investment portfolio in various assets, which will help to balance the assets. If you are looking for a long-term investment plan, then a 5-year investment plan will be an ideal choice.
Also Read: A Complete Guide on Investment banking companies in India
Top investment plan for 5 years
Consider the given investment plans for five years if you are looking for the best investment plan for 5 years:
1. Unit Linked Insurance Plan (ULIP)
A Unit Linked Insurance Plan (ULIP) is a type of financial plan that combines life insurance with market-linked investments. When you pay premiums for a ULIP, a portion goes toward your life coverage, and the rest will be invested in equity and debt funds.
This monthly investment plan for 5 years will help you to stay financially protected and enjoy its benefits. ULIPs offer the flexibility to invest based on your risk tolerance.
This serves as a long-term savings option with tax-saving benefits under Section 80C and 10(10D), and it also allows you to change between investment funds. It is important to note that ULIPs have a 5-year lock-in period, which makes it the best investment plan for 5 years.
Also Read: ULIP plans vs mutual funds – which is the better investment
2. 5 Years National Savings Scheme
The five years national savings scheme is a fixed-income investment option which is offered by the Indian government. For individuals who are looking for the best investment plan for 5 years with a guaranteed return, the scheme offers a safe and secure investment return.
A high rate of interest is offered by 5 years national savings scheme, which is paid annually and is determined by the government. The invested amount will be locked for 5 years, so the investor will not be able to take their funds within the timeframe without paying a penalty.
Investing in the 5-year National Savings Scheme is the best investment plan for 5 years. You can enjoy tax benefits under Section 80C of the Indian Income Tax Act, allowing you to claim deductions of up to 1.5 lakhs per financial year. As per the investor’s income tax slab, the interest earned with this investment is taxable.
3. Savings Account Fixed Deposit
A Savings Account Fixed Deposit (FD) is the best investment plan for growing your wealth. It offers a fixed interest rate over a chosen period, which allows you to select the tenure according to your interest. Many banks and Non-Banking Financial Companies (NBFCs) provide this FD facility.
The benefits include stable, guaranteed returns without any market fluctuations. You can also have the option to renew your FD upon maturity, fixed interest rates for the chosen tenure based on the tenure, and preferential rates are offered for senior citizens.
The return rate depends on factors like tenure and the invested amount, and it can vary between various banks and NBFCs. You can easily calculate your expected returns using online tools offered by your chosen bank or NBFC.
Individuals, companies, NRIs, joint investors, societies, and firms can open a Savings Account Fixed Deposit account, which will be the best investment plan for them. Anyone above 18 years can open the account, while minors can also open FDs under the guidance of a guardian.
Also Read: How to Easily Check Your State Bank of India Account Balance Online
4. Equity Linked Savings Scheme
An Equity Linked Savings Scheme (ELSS) fund is a unique category of mutual funds which will be well suited for 5 year savings plan. It has a special status when it comes to tax benefits as tax deductions under section 80C of the Income Tax Act, 1961 apply to it.
By investing in ELSS mutual funds, you can get valuable tax deductions, where you can potentially save up to Rs 1,50,000. ELSS mutual fund investments are allocated mostly in equity and equity-linked securities like listed shares. These funds have a locked-in period of at least three years, which is the shortest among all section 80C investments.
5. Fixed Maturity Plans
Fixed Maturity Plans (FMPs) are a type of mutual fund which will be invested in fixed-income securities like debt instruments and bonds with a specific maturity date. The fund’s portfolio is designed in such a way that it matures around the same date as the FMP. This will provide a predictable return on investments.
FMPs offer many benefits that include higher returns compared to the traditional investments made in fixed incomes. It also provides an opportunity to invest in a much-diversified portfolio of fixed-income securities with a 5 year savings plan. The FMPs offer a more predictable and stable return compared to other investments.
Final thoughts
To fulfil your long-term financial objectives and make respectable profits, investing in a monthly investment plan for 5 years can be a wise choice. However, before selecting an investing option, you should think about your risk tolerance, your liquidity requirement, and any potential tax benefits.
Also Read:
FAQs
1. Which return investment is best for 5 years?
There are many 5-year investment plans, among them, ULIP, FMP, ELSS, Savings Account Fixed Deposit, and 5 Years National Savings Scheme offer better returns.
2. How can I grow my money in 5 years?
You can only multiply your money in five years using mutual funds or fixed account deposits, and that is among many ways you can grow your money.
Also Read: How To Reset The UPI Pin?
Education loan scheme by Narendra Modi
20 Best Tax saving schemes Under 80C-2023
The Impact of Recent Changes in Interest Rates on PPF Investments
