Best investment options for Indian Millennials in 2017
India’s 700 million millennials are transforming the way business is done. By 2021, over 64 per cent of India’s workforce will be below the age of 30. With unique consumption patterns and fast-paced lifestyles, millennials are redefining the investment landscape in India.
Millennial investors are a study in contradictions. Young and entrepreneurial, most millennials embrace risk if it means high payoffs in the short-term. But with sustainability and social impact also high on their list of priorities, stable investment options that promise assured long-term gains are also popular. With this in mind, let’s take a look at 5 of the best investment options for millennial investors in 2017.
ELSS Mutual Funds
ELSS or equity-linked savings schemes are a type of diversified mutual fund that offer the highest returns (14 per cent – 16 per cent) of any investment instrument. An ELSS Systematic Investment Plan allows small amounts to be invested every month, giving millennial investors the flexibility to enjoy the benefits of investing even as they finance their lavish lifestyles.
Unit Linked Insurance Plans
For investors looking for the best of both worlds, United Linked Insurance Plans(ULIPs) are worth exploring. ULIPs provide risk cover to the investor that is supplanted with qualified investments into stocks, mutual funds, or bonds.
ULIP investments are also eligible for tax savings, with up to to Rs 1.5 lakh exempt from taxable income under Section 80C.
Fixed Deposits
Fixed deposits offer a higher rate of returns than savings accounts and are a great choice for risk-averse millennial investors.The longer lock-in period of 5 years might put off anyone looking for quick gains, but an increasing number of young investors are beginning to realize the benefits of investing into fixed deposits. With their long tenure, FDs encourage a savings habit and instill a sense of financial discipline in a generation accustomed to living beyond their means.
Life Insurance
Although life insurance penetration in India remains below a dismal 3 per cent, ambitious millennials in it for the long haul are increasingly turning to life insurance policies as a viable, attractive investment instrument. While many view it as a way to secure their financial independence, others consider it a means to achieve long-term goals, such as planning an early retirement.
For adrenaline junkies and the more adventurously-inclined among millennials, life insurance policies are a no-brainer. As with other investment options, life insurance policies qualify for tax exemption. Investors can claim exemptions on life insurance premium payments up to Rs 1.5 lakh under section 80C in the name of the taxpayer, taxpayer’s spouse or children.
Employee Provident Fund (EPF)
Unpopular among millennial investors as it may be, the Employee Provident Fund is nevertheless a good alternative to the capital market for those looking for a robust investment option and a healthy retirement fund.
