One-time investments involve making a single lump-sum payment into a financial product. These investments can be a powerful tool for achieving financial goals, as they often benefit from compound growth and can yield significant returns.
By committing a one-time amount, you set the stage for potential long-term gains, which can help secure your financial future, whether you are saving for retirement, a major purchase, or other financial milestones.
Best One-Time Investment Plan and Their Features
Here are some of the best one-time investment plans that you can consider.
1. Sovereign Gold Bond
Sovereign Gold Bonds (SGBs) are government-backed securities issued by the Reserve Bank of India. Unlike gold ornaments, it allows you to invest in gold without owning it physically. The bond offers a fixed yearly interest rate of 2.50% (payable semi-annually), with the added benefit of returns linked to gold prices.
However, SGB has specific terms and restrictions. You cannot withdraw your investment for the first 5 years. Also, the maximum tenure you can choose to stay invested in is eight years. In addition, the minimum investment is equivalent to 1 gram of 999-quality gold, with a maximum capping of 4 kgs for individuals and HUFs.
Regarding taxation, the interest income from this bond will be taxed per your slab. On the other hand, gains from SGB will be tax-exempt if you hold it until maturity. The gains will be subject to long-term capital gain tax if redeemed before.
2. Sukanya Samriddhi Yojana (SSY)
SSY is a government-backed plan to offer financial security for your female child. This scheme aims to drive the central government’s ‘Beti Bachao, Beti Padhao’ effort. You can invest in this scheme from the day your girl kid is born until she is 10. A household can have a maximum of two accounts.
SSY matures when your daughter turns 21 or marries after the age of 18. It gives an annual return of 8.2%. Furthermore, your contribution to this scheme is deductible under section 80C.
Similarly, the interest earned is tax deductible under Section 10. You can open this account at any post office, but the minimum deposit is Rs 250, and the maximum investment limit is Rs 1.5 lakh per year.
3. Public Provident Fund (PPF)
PPF is a long-term government-backed scheme offering guaranteed returns. It has a maturity period of up to 15 years. However, you are not permitted to make withdrawals during this period. Once your investment matures, you can extend it in blocks of 5 years, with or without any fresh investment.
Currently, PPF offers an interest rate of 7.1% per annum. The government reviews the rate every quarter and it is subject to revision.
PPF offers a tax benefit on your contributions under section 80C, while the interest earned and the maturity proceeds are tax-exempt.
You can open a PPF account at a post office with a minimum investment of Rs 500 and a maximum limit of Rs 1.5 lakh per annum. If you wish to proceed with installments instead of making a lump sum payment, you can do so in a maximum of 12 annual installment payments.
Apart from returns, one of the key features of PPF is that you can obtain a loan against this investment from the beginning of the 3rd year until the end of the 6th year after opening your PPF account. These loans can be for a maximum of 36 months.
4. National Pension Scheme
NPS is a government-sponsored pension scheme available to all Indian citizens between the ages of 18 and 65. The NPS features two distinct account types: Tier I and Tier II. The Tier I account is a non-withdrawable account meant for retirement savings. On the other hand, the Tier II account is a voluntary savings account from which you, as a subscriber, can withdraw your money whenever you want.
The NPS allocates your contributions across different asset categories, such as equity, corporate bonds, government bonds, and alternative investments, according to your selected asset allocation. Your returns are influenced by market conditions.
Contributions to the NPS are eligible for tax deductions under Section 80C, Section 80CCD(1), 80CCD(1B), and 80CCD(2) of the Income Tax Act, subject to certain conditions.
5. ULIP
ULIP, or Unit Linked Insurance Plan, is an investment scheme that combines the benefits of investment and insurance. It offers a dual advantage of life cover and wealth creation. When you invest in this plan, a portion of the premium goes towards providing life insurance coverage. In contrast, the remaining amount is invested in various equity, debt, or balanced funds, based on your risk appetite.
The investment portion of ULIPs is subject to market risks, and the returns are not guaranteed. However, they have the potential to generate higher returns compared to traditional insurance products.
One of the key features of ULIPs is their flexibility. During the policy term, you can switch between different fund options depending on your changing financial goals and market conditions. ULIPs also provide tax perks under Sections 10(10D) and 80C. However, the scheme has a lock-in period of five years.
6. Mutual Fund Scheme (Lumpsum)
Mutual funds pool capital from numerous investors with the shared objective of investing in a group of stocks or debt instruments. Professional fund managers manage these schemes to generate higher returns than traditional investment schemes. This makes mutual funds one of the best one-time investment plans.
Depending on your preference, you can make a one-time investment in equity-oriented schemes, debt funds, or hybrids that offer balanced returns while mitigating risks.
When investing in mutual funds, remember that returns are tied to the market, and any downward movement can result in a loss. Therefore, analyze the current market trends, government regulations, and changes in interest rates before investing.
Conclusion
To wrap up, one-time investment plans like Sovereign Gold Bonds, Sukanya Samriddhi Yojana, Public Provident Fund, National Pension Scheme, ULIPs, and Mutual Funds offer diverse options to achieve financial goals.
These investments can help you achieve your financial goals. However, consider your risk appetite for choosing the right plan.
