Prime Investment Options for Young Adults in India: a Closer Look

Swarna Karmakar
Apr 9, 2024
3 min read

As a young adult, you may have seen your parents give paramount importance to investment and sacrifice many of their wishes for future endeavors. It's true that wealth cannot be generated overnight. You must start investing money little by little to be financially independent. According to studies, 72% of millennials in India invested in Systematic Investment Plan (SIP), and 28% began with a lump-sum investment in 2023.

But with so many investment options for young adults in India, it's difficult to choose the best option. It is quite overwhelming. That's why, in this article, we will discuss the best investment options in India, important factors to consider while choosing an investment plan and why you should start investing from a young age.

What are the Best Investment Options for Young Adults in India?

Mutual Fund Investment

Mutual funds are one of the most popular market-linked investment tools. It is basically a shared investment where multiple people invest in a company's bond or stock. Though you can achieve the highest possible returns within a short time compared to others, it also comes with potential risk.

But keep in mind that the risk will depend upon the bond or stock you want to invest in. To minimize the risks, investing for a longer tenure can be a good solution. Since an expert fund manager manages the investment plan thoroughly, you don't need to monitor it continuously.

Pension Plans for Retirement

We should plan for our retirement phase at an early age. Since the future is uncertain in today's competitive world, we must be prepared for it from today. National Pension System (NPS) and Employee Provident Fund or Public Provident Fund (PPF) are the two best investment options in India for youngsters.

There are two essential factors that determine the estimated retirement corpus. The following are,

Your current income
Your expenses

Direct Equity

Equity is also known as stocks and shares which is one of the most popular investment options for young adults in India. According to research, 17 percent of all Indian households invested in stocks and shared in 2023. Simply put, there are publicly listed companies that you can trade on stock exchanges.

You should be very careful when it comes to choosing the equity or company share because it is mainly conducted based on market movement. Basically, if the company earns profits, then you may get a generous return compared to other investment plans.

But if the company runs on loss, then you are at risk of capital loss. Therefore, before investing in equity, try to research the company and market conditions well to make an informed decision.

Tax-Saving Deposits

There are several types of tax savings and investment strategies for youth in India, such as, Fixed Deposits and Recurring Deposits. In today's world, FD is one of the safest investments with high returns in India.

Keep in mind that these investment options for young adults in India are not affected by market movements or other factors. You can start a fixed deposit online from the comfort of your home. Remember that the interest you will get depends upon the tenure of the deposit and the principal value of the investment.

Why Should You Start Investing When You're Still Young?

There is no doubt that investment is one of the most effective solutions to battle with inflation. As time passes, the more you will notice the effect of inflation on the financial situation in our country. As a young professional, you may notice that your paycheck disappears faster than you can track it.

While it might seem more tempting to spend your hard-earned cash today, investing early will help you bring financial stability to your future. There are several reasons you must start investing at an early age. They are:

You will get more time to make up for the loss on investment.
You can save more.
Your future will be secured
Starting investment at a young age will provide sufficient time to grow your wealth significantly.
You can support your retirement plan
You will get the opportunity to become a creditor.

Invest Smart for Your Future!

There are several savings and investment strategies for youth in India that Gen Z must consider to get financial independence and stability. Remember that choosing the right investment options for young adults in India is significant because it impacts their future financial security.

Written by: Swarna Karmakar 
Word count: 741 
Time taken: 1 hour 
FC Readability score: 64.3 
AI/Plagiarism: none