03/01/2024 | 4 Comments

Investment is a responsibility and hence you must make your investment choices carefully. Though millennials are more technologically advanced and have a better understanding of the modern financial world than the previous generations, it cannot be denied that they also need to build proper strategies to make their way through this complex world. Moreover, as millennials are often considered relatively more risk-taking, they certainly have a wide range of investment options to look out for. So, if you are a millennial looking for the best investment choices, then you have reached the right place. Here, we have listed down the top investment options for millennials.

Top Investment Options for Millennials

    1.Mutual Funds

    Mutual funds can certainly serve as the starting point for investment for millennials. These funds pool money from various investors and then invest it in a diversified portfolio of stocks, bonds, or other securities. This is how the risk associated with investment becomes low and then you can easily register profits over a long term. Some of the benefits of investing in mutual funds are listed below:

    • Mutual funds offer diversification and hence, you can easily spread your risk across various assets, thereby, minimising the impact of a poor-performing investment.
    • You do not need to professionally manage your accounts as you would have expert fund managers to make investment decisions on your behalf.
    • There is an affordability factor for young investors as you can start with as little as ₹100.

    2.Stock Investments

    Though a volatile market, it can be extremely beneficial. Stock investments are for those who are seeking a more hands-on approach as direct stock investments allow you to buy shares in individual companies. This way you get a deeper understanding of the market, which eventually allows you to get potentially higher returns in future. Also, for investing in stocks, you just need to have a demat account and you are good to start on your own. Investing in stocks can be considered for the following reasons:

    • If you invest in the right stocks, you can yield unprecedented profits over time.
    • Stocks are highly liquid as you can buy and sell them whenever you want.
    • Stock investing is perfect for those who have a high-risk tolerance and a long-term investment plan.

    3.P2P Lending

    P2P lending, also known as peer-to-peer lending, is another investment avenue you can consider being a millennial. It is a form of lending that has become popular in the last couple of years and is gaining attention from investors worldwide. In P2P lending, investors directly connect with borrowers with the help of online platforms like 13Karat without the involvement of any bank or financial institution. Here are some benefits of investing in P2P platforms:

    • P2P lending allows you to diversity your investment portfolio, thereby, reducing the risk
    • You often get higher returns on P2P lending platforms than what you may get with traditional banks
    • By investing in P2P lending, you can support a wide range of borrowers and contribute to the economy of the nation.

    4.National Pension Scheme

    Backed by the Government of India, the National Pension Scheme (NPS) is a retirement savings scheme wherein you can combine equity, fixed deposits, liquid funds, and government bonds and save them for future returns. It is perfect for millennials as investing in the National Pension Scheme can provide them with great financial security post-retirement. Here is why you should invest in the NPS:

    • You can claim tax benefits with the National Pension Scheme as NPS offers tax deductions under Section 80C.
    • Investing in the National Pension Scheme can help you have a secured life post-retirement.
    • You can contribute as per your financial goals as it allows varied contributions during your working years.

    5.Life Insurance Plans

    Insurance Plans

    There is no doubt that life insurance plans provide you with financial protection. However, there is a lot more to it when you dig. Life insurance plans can also serve as investment plans as there are certain policies like Unit-Linked Insurance Plans (ULIPs) that offer you cash value over a period of time. Some reasons to invest in life insurance plans are:

    • Life insurance plans provide life coverage as well as allow you for wealth creation.
    • There are also tax benefits involved as premiums paid are eligible for tax deductions.

    Also Read: Investment Strategy To Maximise Returns In 2024

    6.Public Provident Fund (PPF)

    Quite a popular investment option, PPF is a traditional yet reliable choice for millennials. The Public Provident Fund (PPF) is a government-backed savings scheme with a fixed interest rate. Hence, when you deposit your money in a provident fund, you get fixed interest every year. It is a secure option for basic investors. Some of the benefits of investing in PPFs are:

    • These funds offer you guaranteed returns as they are government-backed.
    • Contributions to these funds are tax-exempt.
    • You can save a lot of money and develop a disciplined and long-term savings habit.

    7.SIP (Systematic Investment Plan)

    A Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly in mutual funds. It is a great way for millennials to start investing without needing a large amount of money upfront. Benefits of SIPs include:

    • Encourages regular saving habits
    • Reduces the impact of market volatility by spreading out the investment
    • You can start with a small amount and gradually increase your investment
    • Benefits from the power of compounding over time

    8.Gold Investments

    Gold is quite a popular choice in India as it has been a traditional investment in the country for centuries. Millennials can invest in gold through physical gold, gold ETFs, or sovereign gold bonds. Major reasons to invest in gold include:

    • Gold is considered a safe investment during economic uncertainties
    • Gold maintains its value over time and protects against inflation.
    • Gold can be easily bought and sold and hence, has high liquidity.