Once you start earning money, investments help you grow that money. They become an important part of your financial portfolio. But should you go for the usual options or explore offbeat investments? What offbeat investments are available to Indians? Here goes.
If you are on the other end of the spectrum and you proactively learn and invest, this blog is for you. Some of the most common investment avenues are mutual funds, stocks, real estate, and bank facilitated instruments like FDs, PPF, NSC, etc.
If you have already exhausted these avenues and are out looking for more opportunities, do not fret. This blog will look at unorthodox, offbeat investments that will diversify your portfolio and give you the maximum possible ROI.
The majority of investors have their eyes set on real estate properties. Real estate is an evergreen investment avenue that is guaranteed to give you profits over the span of a few years.
Although, buying a property requires a huge seed capital, and most investors do not have that much financial stability. This is where REITs come in to mitigate this issue.
REITs, short for Real Estate Investment Trusts, are companies that own income-generating real estate in different parts of India. The REITs are publicly listed in the National Stock Exchange and the Bombay Stock Exchange. To invest in REITs, one needs a Demat account. Buying REITs is just like buying shares. You can invest as low as INR 500 for a share of REIT in India.
As of 2021, there are only three REITs available for investment for the public in India.
- Embassy Office Parks REIT
- Mindspace Business Park REIT
- Brookfield India Real Estate Trust
Small Finance Banks
As mentioned above, banks offer numerous financial instruments to invest in. Even the simple act of depositing money in a savings account accumulates a small percentage of interest every year.
What most people don’t know is that RBI has sanctioned multiple small finance banks that are funded privately to offer similar banking instruments. These banks are not permitted to provide loans as they are new to the market.
To compensate for such shortcomings, small finance banks offer lucrative offers on their services to attract more customers. Some small finance banks offer up to 6-7% returns on a savings account and up to 9-10% on twelve-month and twenty four-month FDs. These returns can compete with equity funds as well, and you should seriously consider this avenue.
Tax Saving bonds
Along with a decent ROI, the tax-saving capabilities of an instrument must also be considered. Tax saving bonds are an excellent investment option for investors who have a diverse portfolio and are trying to reduce their tax liability.
In India, tax-free bonds are normally issued by companies like IREDA, NHAI, IRFC, REC etc. These bongs typically have a lock-in period of seven years. The tenure might seem a bit extensive, but the interest you gain on these are entirely tax-free. These bonds are essentially utilised to reduce your tax long term capital gains, making it a must-have for new investors.
Investments aren’t just a mathematical equation waiting to be cracked. Every investor is unique, and based on your needs; you need to figure out the right plan for you. Having the foresight to plan ahead is essential, but so is going with the flow and changing strategies as per the current scenario.