Small Investments, Big Returns! Top 5 Investment Options for Beginners That Will Build a Strong Futur

How to start investing with little money? Learn about 5 smart investment options that can yield big returns even with a small amount. Here's information that can be extremely helpful for Gen Z, beginners, and those with low salaries.

People often think that investing requires a lot of money, and what will small savings do? Thinking about this, they don't invest their money anywhere. This is the biggest mistake. A small salary will grow into a large one in the future, but the time lost by not saving will cause you significant losses. Therefore, whether your income is small or high, it's important to start investing. A smart investor is one who starts with a small amount and gradually builds their wealth. If you've just landed a new job and your income is low, don't worry. Learn about 5 smart options that will bring you significant benefits in the future.

1. Mutual Fund SIP – Start with ₹500

SIP, or Systematic Investment Plan, is the easiest and lowest-risk way to build wealth. You can start investing with as little as ₹500. In some places, you can invest with as little as ₹500. SIPs are used to invest in mutual funds. The average long-term return is estimated to be around 12%. Therefore, this investment can yield significant returns over the long term. To build wealth, start with ₹500 and, as your income increases, increase your SIP amount step-up. This will be very beneficial. The good thing is that it doesn't require market knowledge.

2. Public Provident Fund (PPF) – Guaranteed Returns

PPF is a scheme that can be started with an annual investment of ₹500, with a maximum of ₹1.5 lakh per year. PPF is perfect for those seeking long-term and safe investments. It can help build a substantial corpus over the long term. However, if you invest ₹500 annually, you won't even realize the returns. Therefore, it's best to decide on an amount according to your capacity, whether ₹500, ₹100, ₹2000, and invest it monthly.

The interest rate on this scheme is reviewed quarterly. It has maintained a long-term rate of 7.1%, which is better than many other schemes. Being classified under the EEE category, this scheme saves you tax in three ways. You can start this scheme by visiting a bank or post office.

3. NPS (National Pension System) – Future Security

NPS is designed for your retirement. It is a market-linked government scheme. This scheme is considered very good for long-term investment and tax savings. You can manage both a retirement fund and a pension through this scheme. If you are in your 20s and start NPS at this age, you can build a substantial corpus by the time you are 60.

4. Recurring Deposit (RD) – Guaranteed Returns

Some investments should be long-term, while others should be short-term, so that if you ever need money, you don't have to touch long-term investments. RD can be a good scheme for this. You can start investing as little as ₹100. However, the better your investments, the more you can accumulate. This scheme does not involve market risk. You'll find RD options at both banks and post offices. Banks offer it with tenures ranging from 1 year to 10 years, while post offices offer it with a 5-year tenure.

5. Gold – Great Returns Without Worry

Investing in gold is a long-standing tradition. Experts recommend including at least 10% gold in your portfolio. However, digital gold or gold ETFs are a better investment option today than physical gold. Through these, you invest in pure 24-carat gold, eliminate making charges, and don't need to worry too much about its security.

FAQs

Q1. Is investing in small amounts possible?
Yes, you can start with as little as ₹500 with options like mutual fund SIPs, digital gold, and RDs.

Q2. When should you start investing?
The sooner you start, the more you'll benefit from compound interest.

Q3. Is SIP safe for beginners?
Yes, SIP is a very stable and rewarding option in the long term.

Q4. Does NPS offer tax benefits?
Yes, you can avail tax exemption of Rs 1.5 lakh under 80CCD(1) and Rs 50,000 under 80CCD(1B) in NPS.