Whatsapp Icon

What are the 4 Popular Modes of Investment in India?

4 Most Popular Mode of Investments in India

Investing wisely is crucial for achieving financial stability and growth. India offers a plethora of investment options, each with its own set of features, risks, and potential returns. Whether you’re a salaried individual, a business owner, or a student, understanding these modes of investment can empower you to make informed decisions. Let’s explore some of the top investment avenues in India:

1. Public Provident Fund (PPF)

  • Description: PPF is a government-backed savings scheme that combines safety and attractive returns.

  • Features:
    • Tax benefits under Section 80C.
    • The lock-in period of 15 years.
    • Compound interest.
    • Flexibility to extend the account in blocks of 5 years.
  • Returns: Historically around 7% to 8% per annum.
  • Suitable For: Long-term savings, retirement planning.

2. National Pension System (NPS)

  • Description: NPS is a portable pension scheme that allows you to accumulate a retirement corpus.

  • Features:
    • Choice of investment options (Equity, Corporate Bonds, Government Securities).
    • Tax benefits under Section 80CCD.
    • Regular contributions during working years.
  • Returns: Varies based on the chosen asset allocation.
  • Suitable For: Retirement planning, tax-efficient savings.

3. Equity Linked Savings Scheme (ELSS)

  • Description: ELSS is a tax-saving mutual fund scheme that invests primarily in equities.

  • Features:
    • The lock-in period of 3 years.
    • Potential for high returns.
    • Tax benefits under Section 80C.
  • Returns: Market-linked, historically around 12% to 15% per annum.
  • Suitable For: Tax-saving and wealth creation.

4. Fixed Deposits (FD)

  • Description: FDs are low-risk fixed-income instruments offered by banks.

  • Features:
    • Fixed tenure.
    • Assured returns.
    • Choice of interest payout frequency.
  • Returns: Varies based on the bank and tenure.
  • Suitable For: Short-term savings, risk-averse investors.

5. Mutual Funds

  • Description: Mutual funds pool money from investors and invest in various asset classes.

  • Features:
    • Diversification.
    • Professional fund management.
    • Liquidity.
  • Returns: Varies based on the fund type (equity, debt, hybrid).
  • Suitable For: Various financial goals, and risk tolerance levels.

6. Real Estate

  • Description: Investing in residential or commercial properties.

  • Features:
    • Appreciation potential.
    • Rental income.
    • Long-term commitment.
  • Returns: Historically around 8% to 10% per annum.
  • Suitable For: Long-term wealth creation.

7. Gold

  • Description: Physical gold or gold ETFs.

  • Features:
    • Hedge against inflation.
    • Safe-haven asset.
    • Liquidity.
  • Returns: Varies based on market conditions.
  • Suitable For: Portfolio diversification.

8. Bonds

  • Description: Fixed-income securities issued by governments or corporations.

  • Features:
    • Regular interest payments.
    • Capital protection.
    • Various types (government bonds, corporate bonds).
  • Returns: Fixed interest rates.
  • Suitable For: Risk-averse investors.


You can start laying out your modes of investment with these distinct ways of investing in India. By investing wisely, you can ensure that your hard-earned money is parked in investments that help you reach your short- and long-term financial goals. Investment planning is an excellent approach to prepare for retirement so that you can finally do the things you've always. You can do anything, whether it's acquiring a new skill, opening a restaurant, or traveling the world.


*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

Suggested Plans

Bharti AXA Life Wealth Pro

  • An Individual Linked life cover with Insurance cum Savings Plan.
  • Choose a Variant: The plan offers you two variants to choose from a) Growth Variant b) Legacy variant
  • Grow your wealth further with Wealth booster
  • Multiple Investment Strategies to suit your investment needs
  • Tax benefits