India Investment Instruments 2019

The table below shows average returns expected from variety of investment options. You should refer it to help you plan out your next short or long term investment. Actual returns depends on your scheme's performance, investment duration and your tax bucket. One should have a balanced structure portfolio of a mix of equity and debt funds.


1m 3m 6m 1y 3y 5y Liquidity Risk
Payments Bank 4 4 4 4 4 4 High Low
Savings Account 4 4 4 4 4 4 High Low
Fixed Deposit 3.5 3.5 7 7 7 7 Low Low
Recurring Deposit 6.25 6.25 6.5 6.5 6.25 6.25 Low Low
Gold 0 0 4 8 20 10 High Low
Silver 0 0 0 0 17 -12 High Low
Cryptocurrency 18 -60 -60 -400 1000 500 High High
Small Cap Fund 3 7.5 -7.5 -21.5 9 21.5 Low High
Equity Linked Saving Scheme 2.5 7.5 -2 -9 11.5 16 Low High
Arbitrage Fund 0.5 1.5 3 6.5 6.5 7 Low Low
Gilt Fund 0.8 4 5 6.5 8 9.5 Low Low
Liquid Fund 0.6 1.8 3.5 7 7 7.5 High Low
Index Fund 2 5.5 1 1.5 12 12.5 Low High


Notes:
  • I am not an investment expert and this information should be considered only for reference
  • Above table shows return in percentage (%); m represents months and y represents years
  • The data provided is not exact and it imitates CAGR (Category Average) collected over variety of resources as per the time of writing this blog
  • Payments banks have a upper limit of 1,00,000 (1 lakh) rupees
  • Index funds represents various BSE and NSE indices based funds
  • Small Cap, Index(Large Cap) and ELSS are Equity Mutual Funds
  • Arbitrage is Hybrid/Balanced Mutual Fund
  • Gilt and Liquid are Debt Mutual Funds
  • Returns over 1 year are Annualized
  • Mutual funds attracts 15% tax on gain if invested less than a year and 10% rate if invested for more than a year
  • Cryptocurrency is highly volatile thus you should only invest your throw-away money into it; prices are derived from Bitcoin (BTC) prices
  • Liquidity and Tax rates should be focused upon while drafting portfolio
  • Low liquidity refers to lock in time before modest positive return
  • Equity stocks are high risk and Debt stocks are low risk
  • High risk investment generally yields high returns
  • For Tax saving purpose you should invest in ELSS which has 3 year lock in periods and principal amount is exempted from tax up to 1,50,000 (1 lakh 50 thousand) rupees under 80C
  • You can expect 8-12% interest on ELSS after maturity, gains over 1,00,000 (1 lakh) in a year is taxed at 10% rate
  • For long term investment of 5 years or more you should opt for Small Cap or Blue Chip funds
  • For investments between 1 to 3 years choose Liquid Funds
  • Go for Savings accounts for short terms investments up to a year