Investment Plans

Which One-Time Investment Plans You Should Invest In?

By Admin
Mar 04, 2021
which one-time investment plans you should invest in

There are different types of investment avenues available in the market. Some avenues require you to invest regularly over a period of time while others are one-time plans wherein you can invest only once and then watch your investment grow. 

Regular investment avenues are suitable for those who want to save and invest in a disciplined manner over a long-term period and create a substantial corpus. 

One-time investment avenues, on the other hand, are suitable for investors who have a large chunk of cash in their hands which they want to invest at once. Investing such considerable amounts might not be possible regularly and so such investors look for one-time investment opportunities.

If you are also an investor who is looking for a one-time investment plan, given below are some choices which you can consider –

1. Mutual funds

Mutual funds are quite popular among investors. They are market-linked investment avenues which help you get inflation-adjusted returns on your investment and build a sizable corpus. The benefits of investing in mutual fund schemes are as follows –

  • They are liquid investment avenues wherein you can redeem your funds whenever you want to (except ELSS schemes which have a lock-in period of 3 years)
  • Investment into ELSS schemes helps you avail tax benefits under Section 80C of the Income Tax Act, 1961. You can claim a deduction of up to INR 1.5 lakhs from your taxable income by investing in ELSS schemes
  • Returns from equity mutual funds, if redeemed after 12 months, qualify for long term capital gains. Such gains are exempted from tax up to INR 1 lakh
  • Long term capital gains earned from debt funds allow you the benefit of indexation which reduces your tax liability
  • Mutual funds come in different variants making them suitable for investors having different risk profiles

You can invest in a lump sum in one or more mutual fund schemes and get attractive returns on your investment.

2. Fixed deposits 

Fixed deposits are suitable for investors who are looking at guaranteed interest earnings. Fixed deposits promise the following benefits –

  • Guaranteed returns which are independent of market movements
  • Positive returns and no capital erosion even if the market is falling
  • Investment into 5-year fixed deposits offered by banks and post-offices allows you to claim a deduction under Section 80C. Investment up to INR 1.5 lakhs is allowed as a deduction
  • Senior citizens can enjoy higher interest rates on their deposits. Moreover, interest income earned by them is tax-free up to INR 50,000 under Section 80TTB
  • Bank deposits, up to INR 5 lakhs are secured. Even if the bank winds up and liquidates, deposits up to INR 5 lakhs are secured by the RBI

You can earn interest up to 9% by investing in a lump sum through fixed deposit schemes.

3. Gold 

Gold is popular as a traditional investment choice and also because of its ornamental value. You can invest in a lump sum in gold through physical gold, gold ETFs, sovereign gold bonds or gold mutual funds. The returns on gold investment depend on the cyclical movement of gold. And, the investment as well as the returns on gold is taxable.

4. Real estate 

If you have a considerable amount of money to invest, you can invest in real estate. Real estate can give good returns if you let out the property on rent. If you need a house for self-accommodation, you can invest in a property or make a down payment on a home loan through one-time investment. However, if you are looking at investment, you can invest in another property to be let out on rent or in a plot of land for creating assets.

5. Life insurance plans

Life insurance plans allow one-time investment through a single premium as well. If you opt for single premium plans, you have to make a one-time investment in the policy while you would get coverage for the chosen term of the plan. 

For investment purposes, you can consider endowment or money back plans which give guaranteed returns. If, however, you are looking at market-linked returns, invest in unit-linked plans (ULIPs), which are flexible, provide insurance coverage, give attractive returns and also give tax benefits. The single premium paid for a life insurance policy would be allowed as a deduction from taxable income under Section 80C.

The maximum deduction available would be 10% of the sum assured of INR 1.5 lakhs, whichever is lower. The death benefit received from the policy would be completely tax-free. Moreover, if the premium is up to 10% of the sum assured, the maturity benefit, including bonuses, would also be completely tax-free in your hands under Section 10 (10D).

6. Immediate annuity plans

These plans are suitable for retired individuals or individuals who are nearing retirement. Immediate annuity plans allow you to get regular annuity pay-outs lifelong with a one-time investment. You can choose to receive annuity pay-outs on your life as well as on the life of your spouse. However, the investment done into immediate annuity plans and the annuity pay-outs received would be taxable in your hands.

7. Senior Citizen Saving Scheme (SCSS)

SCSS is another investment opportunity which is meant for senior citizens, i.e. individuals aged 60 years and above. This is a one-time investment opportunity wherein interest income is paid regularly, as and when it is earned and the minimum lock-in period is 5 years. 

SCSS is a fixed-income instrument wherein the maximum amount of deposit is limited to INR 15 lakhs. Deposits up to INR 1.5 lakhs can be claimed as a deduction under Section 80C. The current rate of interest on the scheme is 7.4% with effect from 1st October 2020. Interest earned is taxable as per the income tax slab rates.

8. National Saving Certificates (NSC) and Kisan Vikas Patra (KVP)

You can invest in NSC and KVP too for one-time investment opportunities. NSC is a 5-year deposit scheme wherein under KVP the duration depends on the interest rate. 

Investment into both the schemes is allowed as a deduction under Section 80C. However, on the maturity of the schemes, the interest earned would be taxable. Both are fixed interest schemes. The interest on NSC as on 1st October 2020 stands at 6.8% and for KVP it is 6.9%. 

Under KVP, the invested amount is doubled on maturity and therefore, the duration of the deposit depends on the interest at which you invest.

These are some of the best investment avenues, which you can choose for a one-time investment. All these avenues have a different feature, tenure, and risk-return profile. So, assess these avenues and choose between them to build a diversified portfolio.

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