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Long Term Investment Options in India

Long-term investments help achieve your financial goals like early retirement, child education, etc. Here's a list of long-term investment options to help create wealth over the long term.

  • Oct 30, 2023
Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

Long-term investment plans, when well-planned, tend to outperform short-term investments. Therefore, long-term investment plans with high returns are the way to go if you’re saving for your children’s education or marriage or want to buy a dream home or plot of land because you can start putting money down now and wait for the right time to spend it. Generally, investments made over more than five years are long-term investment plans. It also means you won’t use those funds until you require them. Numerous long-term saving plans can be considered the best long-term investment in India. Some of them are mentioned below.

Best Long-Term Savings Plans

Public Provident Fund

PPF, one of the best long-term investment plans, is similar to the Employee Provident Fund (EPF) offered to employees. PPF savings can be retained for up to 15 years, with the government setting an annual rate of return of 7%. The most important perk of investing in a PPF program is that it qualifies for a tax credit under Section 80C. Under this program, the investor must open a PPF account, and any deposits made throughout the year qualify for Income Tax Act, Section 80C deductions.

Bank Deposits (FDs)

When you talk about the best saving schemes in India, bank deposits top the list. There are a few alternatives in India; however, these are the most conventional long-term savings plans. Pre-established deposits given by banks are the safest, as the funds can be deposited for a longer time, such as three, five, or even ten years, with a fixed rate of return ranging from 3-6.5% every year. Moreover, it is possible to draw the money once the period has ended. The interest rates are more significant than savings accounts and RDs, and early withdrawal is possible. However, there is a penalty. The aspects mentioned above, and many others, make bank deposits the best long-term investment in India.

Unit-Linked Insurance Plans

If you’re seeking long-term saving plans that blend investment with insurance, then ULIP is the best option. One part of the instalment you pay is used to safeguard your life, while the remaining part is invested in stock markets to generate profits. Returns are likely to be approximately 8%, but prices fluctuate because of investment in inequities. Their premiums and administrative costs can be likewise expensive for the same reason. However, when invested prudently, Unit-Linked Insurance Plans are the best long-term investment plans with high returns.

National Pension System

NPS is one of the most reliable long-term investments in India developed by the Indian government to provide monthly income to participants after they retire. One can continue to invest in this scheme until they reach the age of 60; after that, they must use at least 40% of their money to acquire a regular yearly income plan. After that, the remaining amount can be taken out as a lump sum payment.

Mutual Funds and Stocks

Stocks are the best long-term investment plans if you want to generate significant returns over a long time. You can make investments for the long term in stocks or mutual funds (SIP) through a systematic investment strategy. In any event, you should expect returns of 12 to 16%, with 20 to 30% attainable if the economy is doing well. Some of the best mutual fund options for the long-term scheme include large-cap and mid-cap funds with a track record of delivering excellent returns.

Saving Schemes of Post Office

Post offices, like banks, provide a variety of savings plans, which are more popular owing to their security and higher interest rates. The post office savings account, 5-year senior citizen savings plan, post office monthly income scheme account, National savings certificate, Sukanya Samriddhi Yojana, Kisan Vikas Patra, and others are the most critical well-known post office savings programs. They are undeniably the best investment plan for a child in the post office.


Bonds offer a safer alternative to stock investments if you find them to be unsettling. You can choose between inflation-indexed bonds, where the interest rates are dependent on inflation, or a 10-year government bond with an interest rate of 7.70%.

Gold Investment

You can invest in gold in any form, including gold bars, gold ETFs, gold mutual funds, gold deposit schemes, etc. Gold is a perennial favourite financial commodity. The bond will feature a 3–7 year lock-in term and a 4% tariff-free interest rate.

Benefits of Investment Plans

Including investment plans in your financial portfolio has various advantages. Here, we’ve included detailed explanations of a few of these advantages.

Protection for Loved ones

Return on investments with coverage offers both returns and life insurance. This means that in the terrible event that the insured passes away, his or her family will either get the full amount for which they were covered as a lump sum or in the form of monthly, quarterly, or half-yearly payments, in addition to the fund value. In the sad event that the family’s breadwinner passes away or they are unable to earn a living, these returns serve to secure the family’s requirements and financial goals.

Goal-based Planning

Saving money for a goal is a terrific method to achieve it, whether that goal is purchasing a home or automobile, covering the expense of a child’s education, preparing for marriage, or retiring. Long-term lock-in investment plans enable investors to achieve long-term financial objectives like saving for a child’s education, starting a retirement fund, etc. The ULIP plans provide several investment choices, and the investor can assess their returns by looking at past earnings and building a financial corpus in a few years.

Wealth Creation

The greatest method to grow your stagnated funds is to combine prudent saving with investing in the correct investment opportunities. You have a great chance to build money over the long run with an investing plan if you make regular, disciplined investments. Gaining high returns on investment will help your money expand over time and give your loved ones a financial safety net.


The market currently offers a wide variety of investment plans, giving investors the freedom to select the best one for their financial objectives, time horizon, and risk tolerance.


Money comes next, then safety. The investment plans with the lowest yields or rates of income return are the ones that are most likely to be safe. Inevitably, investors must accept risks and give up some protection in order to maximise their returns. The risk rises as the returns do as well.

Tax Minimization

The investors may pursue certain investments as a part of their investment plan in order to leverage tax minimization. Tax reduction is another important goal for investors. The Income Tax Act of 1961’s Sections 80C and 10(10D) allow the investor to take advantage of tax benefits.

How to Choose the Investment Plan?

We may invest our hard-earned money in a variety of money market products in a methodical manner to meet our financial goals, thanks to some of these greatest investment plans in India. Investment plans provide the crucial advantage of optimising savings through focused, long-term investing and wealth growth for the future. The first step in creating an investing plan is to assess your financial needs and risk tolerance before selecting an appropriate strategy. The best investment choices in India include the following.

  • Access your financial goals and requirements.
  • Create a strong strategy by incorporating the right investment plan plus the right insurance that brings it into line with your goals.
  • Evaluate your investment tenure to achieve each goal.
  • Create a diversified portfolio. This means that instead of investing in a particular investment plan, invest in a mix of insurance plans and multiple investment plans.
  • Periodically review your investment plans.

To establish an investing strategy, you must determine your goals, liquidity requirements, investment horizon, and risk tolerance. Choosing which plan to invest in becomes much easier if you have a defined aim. If you’re seeking long-term investment plans with high returns, the above possibilities are worth considering!

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

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- A Consumer Education Initiative series by Kotak Life