Investing wisely has become crucial for anyone looking to secure their financial future. But it is easier said than done. With so many popular ways to start your investing journey, the challenge is multi-level.
Of course, it is important to set aside a certain portion of your earnings towards a corpus, but there’s also a paradox of choice at play.
Most investors in 2025 are focused on finding avenues that provide the best return on investment while still managing risks. An effective strategy is all about combining research, goal-setting, and using modern tools seamlessly.
Taking a Measure of Your Financial Goals and Risk Appetite.
Before identifying the best return on investment, it’s very important to define your financial objectives clearly. Are you planning for retirement, your child’s education, or buying property in the next five to ten years? While these may seem insignificant, considering each needs a large sum of money to achieve, it is important to note that each of these goals have a different time period and risk tolerance and hence, are best tackled with different investment options.
For example, if you are a 35-year-old salaried professional and are considering investing ₹10,000 every single month for retirement, your priority is capital growth over a 25-year horizon. This makes equity-oriented instruments, mutual funds, and ULIPs more suitable for you. But if you are a younger, newly employed individual who wants short-term liquidity for a house down payment, bank FDs or post office savings schemes may provide the right combination of safety and moderate returns.
What Are the Common Types of Investment Options.
Recurring Deposits and Fixed Deposits at Banks:
These conventional tools are safe options since they guarantee the safety of the principal amount itself. Most of the time, interest rates are between 5% and 7% per year, and hence the returns are generally low.
Public Provident Fund (PPF) and National Savings Scheme (NSS):
Both of these options offer tax-free returns with a guarantee from the government. If you invest ₹1,50,000 into these investment tools every year, it may grow to ₹30–35 lakh over 20 years at present rates. These plans are great for cautious investors who want to save money on taxes under Section 80C (under the old tax regime).
Equity-Linked Savings Schemes (ELSS):
ELSS mutual funds mostly invest money into stocks, and your contributions have to stay locked in for three years. They have a higher chance of growth, usually 10–12% over longer periods of time, but the market is more volatile, and there is an associated risk involved.
Unit Linked Insurance Plans (ULIPs):
ULIPs are a type of life insurance that also lets you invest in the stock market. Part of your premium can grow in equity, debt, or hybrid funds. Over time, investors can change their allocations to find the right balance between risk and return. The best ULIP plans not only offer insurance, but they also let you build up wealth over time.
Assessing Returns Objectively.
When identifying investments that deliver the best return on investment, consider the following metrics to make an informed choice.
- Expected Rate of Return: Historical performance data can provide a benchmark, but always keep in mind that the past returns do not guarantee future outcomes. Equity instruments typically outperform fixed-income options over the long term.
- Compounding Benefits: Investments that reinvest returns generate exponential growth over time. For instance, investing ₹10,000 monthly in a ULIP with a 10% expected annual return can grow to over ₹1.2 crore in 25 years.
- Liquidity: High-return instruments often come with restrictions on withdrawal. Evaluate if the investment tenure aligns with your financial needs.
- Tax Efficiency: Certain options, like PPF and ELSS, offer tax exemptions, enhancing net gains. ULIPs also provide tax benefits under Sections 80C (under the old tax regime) and 10(10D) for long-term investments.
Making Better Choices Using Investment Calculators.
An online tool or annual investment calculator might make it easier to compare choices. Investors may calculate their maturity values and see if their chosen instrument fulfils their financial goals by entering their monthly contributions, tenure, and expected returns.
| Investment Option | Monthly Contribution (₹) | Expected Return % | Tenure (Years) | Estimated Maturity (₹) |
| PPF | 12,500 | 7% | 20 | 52,00,000 |
| ELSS | 12,500 | 10% | 20 | 85,00,000 |
| ULIP | 12,500 | 9% | 20 | 78,00,000 + Life Cover |
Balancing Risk and Return Is the Most Important Aspect of Investments.
When trying to get the best return on investment, it’s important to keep risk in check. Equity-based products have a greater possibility of giving more returns, but they do come with market volatility. Instruments with fixed income or government backing are stable but don’t give the best growth. So, investors can lower their risk and get the best returns by distributing their funds among several types of assets, such as stocks, bonds, and hybrid products.
ULIPs are great for people who want to combine insurance and investing. Putting a portion of your contribution into equities increases the chances of long-term growth, and at the same time, the remaining funds that are put into debt funds protect against bear markets. Regularly reviewing your portfolio makes sure that the mix of investments stays in line with your changing goals.
Monitoring Performance and Adjusting Contributions.
Investors can keep track of their progress and change their contributions by using an investment calculator every so often. If predicted maturity doesn’t meet your goals, you can make up the difference by adding more funds or looking into options with greater returns. For instance, Amit, who put money into a ULIP with a moderate equity allocation, changes his plan after five years to incorporate more equity exposure so that he can grow his corpus more by the time he retires.
Regular evaluations may help with tax efficiency as well. Investing in ULIPs along with certain mutual funds will help you get the most deductions under Section 80C (old regime), which will increase your net returns.
Conclusion.
You need an organised approach to find the investment options with the best return on investment. This means setting personal goals, deciding how much risk you’re willing to take, looking into different investment options, and using tools like annual investment calculators to your advantage.
So, if you are ready to start the investment journey or are looking for a switch in your plan, Axis Max Life Insurance is an example of a premium insurance company that offers investment options that help you build wealth, safeguard your assets, and save on taxes all at the same time.
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Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.
Tax benefit is subject to change as per the prevailing tax laws.
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