Where Should You Invest? – Beginner’s Investing Guide

I am sure that each one of us have thought about how and where to invest money to get our money doubled within 21 days. We all want to know what would be the best investment for us and quickly invest money in that scheme, fund, instrument.

Well we will have to break it to you but sadly there exists no single scheme that fits all of us, so we will have to realize our goals both long term and short then decide what’s best for us and then we can invest peacefully and achieve our goals.

Lets see what are the options available to us for investment

Best way to Start Investing For Beginners

As discussed before there exists no scheme that suits all needs of each and everyone of us. So what should we do?

Ask yourself this question: “what is the purpose of my investment?”. Some points to note when asking the question would be

  • Is this investment to save tax.
  • Is this investment goal specific .
  • This is a retirement fund.
  • Or is this done to earn regular income.

 By answering this question you can get a lot of clarity and select a better investing option.

What are the different investment opportunities

There are different investment opportunities in the market and each of which provide different aspects of risk and rewards. When you are clear on your purpose of investment you could make a better investment that upholds your goal.

Some financial tools you might consider:

Direct Equity

You can buy stocks of a particular company and become its part owners, so you automatically become eligible for receiving profit earned by the company.

Investing in equity might not be everyone’s cup of tea as it is a very volatile asset class with no guaranteed returns. So the only sure way to be profitable is to remain invested for a long time. Equity has been able to deliver higher returns than other asset classes.

Although investing in direct equity requires proper knowledge and an in-depth analysis of its movements. So invest in equity only if you have enough patience, knowledge and the time.


  • There is a high risk in the market
  • The stock market have too much fluctuations
  • Uncertainty of the price movement
  • If stocks are not good then you can lose your invested money too.

Quick Tip:

 if you invest in equity then have a high risk appetite as it’s a risky asset class especially in the short term, but if you pick a fundamental strong share then you can make amazing gains in the long term.

Equity Mutual Fund

These mutual fund schemes predominantly invest in equities and are SEBI regulated so they are less risky compared to equity and can diversify your portfolio.

These are managed by professional fund managers who have years of experience so you get that experience along with it which is something you should look forward to.


  • Professionally managed fund
  • Risk mitigation
  • Diversification
  • Small ticket size
  • Tax efficient


  • Not for a short term
  • You as an investor have no control over your investment
  • There are too much choices in the market
  • Higher costs

Debt Mutual Fund

Debt mutual funds are suitable for investors who want steady returns, they are less risky and less volatile when compared to equity mutual funds. So if you have a low risk profile then consider investing in a debt mutual fund.

Debt mutual funds invest in fixed interest generating securities like bonds, government securities, treasury bills, commercial paper and many other money market instruments so they can offer a steady return.

Debt mutual funds are an excellent choice for short term capital gains. Although less risky but it still carries risk with it such as credit risk, debit risk and liquidity risk. They can give you better returns, fixed deposits and savings accounts.


  • Stable returns
  • Hedge against volatility
  • High liquidity
  • Lower fees of maintenance


  • Return on investment is very low
  • Too much choices for new investors
  • You have no control

National Pension Scheme(NPS)

NPS is a government sponsored scheme that allows you to build a corpus for your retirement. While initially it was meant for government employees, later it was opened for all. It is managed by pension fund regulatory and development authority (PFRDA).

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Now that you know why to invest in NPA you should know that there are two choices offered by this scheme which are- active in which you can decide your asset allocation and auto which is a lifestyle based approach.

Once you turn 60 you can withdraw 60% of the accumulated amount while the 40% is received annually in the form of a pension.


  • Low risk investment
  • Guaranteed returns
  • Affordable investment
  • Tax saving


  • Government employees have less benefits than earlier
  • There are withdrawal limits
  • Taxation at the time of withdrawal

Public Provident Fund (PPF)

This asset is quite popular and famous among investors as it also enjoys a special tax benefit called EEE (exempt, exempt, exempt) status, which simply means that amount invested, interest received, and the maturity amount is not liable to any tax.

The rate of interest is decided by the government and the minimum amount to keep it active is rs 500 per month. PPF comes with a lock in period of 15 years which means you can’t withdraw your money before 15 years.

If you want to open a PPF account in any designated post office, just fill the required form and submit the relevant documents.

Bank Fixed Deposits

I am sure you must have experienced your parents forcing you to open a bank FD as it is the safest option and invest your money there. While it is a very safe option, it delivers very less interest compared to its peers.

It is the most popular investment asset where you can invest money to earn assured returns. It can be invested either online or offline

To open an FD account: – fill the FD form and you will get a FD certificate mentioning the principal amount, interest rate, tenure of investment and the maturity amount.


  • It is a very safe option
  • The time duration can vary from months to years
  • You can break an FD before maturity, if needed, but it entails a penalty charge.
  • Some of them are tax saving FDs
  • Senior citizens can earn higher interest rates


  • It offers a very low interest rate
  • If broken before the maturity then it entails a penalty

Real Estate

Investing in real estate has been considered as one of the most profitable investment bets. Investments in real estate can deliver returns in two ways : capital appreciation and rentals.

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If you want to seek capital gains from it then make sure to invest in property developed within the regulatory frameworks, with good connectivity and social infrastructure.

If you want to seek regular rental income then you should vacate the property and give it on a pre decided rent to somebody.


  • Real estate delivers both capital gains and rental income
  • If not used as an investment then it can also be used in self consumption.
  • Most billionaires are rich due to real estate investments
  • Delivers high returns


  • It requires a large token of money to enter which acts as a entry barrier
  • Location matters the most, it decides your rental income
  • There are several reasons of property destruction
  • Fraud risks are high
  • Not liquid


Investing In Gold is considered more than an investment in India, and has been a default investment choice for the majority of indians. Gold is a high value metal and is considered as a great hedge against the stock market or the equity market. However investing in physical gold comes with its own risks like storage and theft along with an additional making charges.

For these reasons the government has started issuing gold bonds (SGBs), they have a fixed tenure of 8 years, but you can sell them after 5 years.


  • Provides great hedge against equity market
  • Investing in gold provides you a diversification in your portfolio
  • It can help you beat inflation
  • Historically gold prices have always increased


  • Physical gold has a storage and theft risk
  • When you own gold you have to pay premiums and taxes
  • Physical gold has making charges which makes it expensive
  • Gives low returns.

Bottom line

Different avenues offer different benefits and come with different risks. So be aware of all the investment options available to you and analyze what they bring to the table.

There is no one option that suits everyone so line them up with your goals and then select the one that suits you the best with maximum returns.



Roonak Khandelwal
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