6 Best Investment Option For Beginners In India

If you are a beginner or novice to investing, it is best to buy into products that you understand. nbsp; As a beginner, until you understand, do not dabble into investments like stocks, which can be pretty complicated for a layman. Here are 6 simple investment options for beginners. The interest earned on the Public Provident Fund is tax free for investors. There are very few investment instruments which are tax free in India. Apart from this you get tax benefits under Sec 80C of up to Rs 1.5 lakhs.The interest rate at 7.9 per cent per annum is simply unbeatable by any bank deposit in the country.If you are a long term investor, it makes sense to invest in this product. The maximum amount that you can invest is Rs 1.5 lakhs and the minimum is Rs 500. One can also avail a loan after a period of three years against balances in the PPF.Advertisement The Kerala Transport Development Finance Corporation (KTDFC) deposit is guaranteed by the government of Kerala and hence the deposits are very safe.The company at the moment gives an interest rate of 8.25 per cent on the deposits on its 1,2 and 3 year deposits.These are extremely safe as they are backed by the government of the state of Kerala. Individuals are allowed to choose various options like 1, 2, 3 and 5 years.You can choose a fixed amount that you could receive monthly, quarterly or yearly or let the amount multiply through the money multiplier scheme. These are safe investments and investors can opt for the same. If you are able to save a small amount from your salary, the best option would be recurring deposits.However, at the moment the problem with recurring deposit is that interest rates are low. Apart from this the interest earned is also taxable, which tends to reduce your overall post tax returns.However, recurring deposit is good for those who have a targeted sum in mind for a particular event, for example a marriage. One can choose the tenure and the amount that one wants to save through this means. For example, if you want Rs 2 lakh for your marriage after 24 months, you can save approx Rs 8,000 each month. This is a very simple investment to understand for beginners.It is important to check with banks on the interest rates that they offer and choose the bank that offers the best rates. This is again a very simple investment that an investor can understand. The interest rate offered is 7.8 per cent, which is much better than interest rates offered by banks in the country.If you purchase a NSC of Rs 100, the amount of maturity will be Rs 146.93 after 5 years. This means the investment has a tenure of 5 years. Investors also get a tax rebate under Sec 80C of the Income Tax Act to the tune of Rs 1.5 lakhs.This again is a very safe investment as the same is backed by the government of India. The interest income earned is not exempted from tax like the PPF. Beginners to investing can also invest in the AAA rated Bajaj Finserv deposits. You can get an interest rate of 7.85 per cent per annum, which can go higher upto 8.20 per cent.Rating agency ICRA has rated it MAAA (stable) rating and CRISIL has accorded it a FAAA/Stable rating, so your investments are never at risk.However, it must be noted that the interest income from such deposits is fully taxable. Mutual Fund SIPs is gaining in popularity. However, we suggest that you need to understand the various options and the schemes. It is advised that you seek professional help if you invest, if you are a beginner.Beginners to investing in mutual funds can read the Mutual Fund guide here