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Best One-Time Investment Plans in India

As an investor, a one-time investment plan can be beneficial for generating a huge corpus over a long period. Read ahead to know more.

  • 5,161 Views | Updated on: Jan 05, 2024

Imagine making a smart move today that sets you on a path to financial security and freedom. In India, there are some incredible one-time investment plans, also known as lump-sum investments, that can promise a brighter and financially secure future.

One-time investment plans are like treasure chests waiting to be opened. You put your money in it once, and it works tirelessly to multiply and secure your future. Whether you dream of a comfortable retirement, your child’s higher education, or just building wealth, investing in the best one-time investment plan is advisable.

What is a One-Time Investment plan?

A one-time investment plan involves putting a single lump sum amount into a particular scheme for a predetermined duration all at once. If you have a large sum of money and a high-risk tolerance, you can invest in a one-time investment plan as an investor.

Advantages of One-Time Investment

While there are various investment approaches, one-time investment holds distinct advantages that can yield superior results compared to periodic contributions.

Immediate Growth Potential

One of the most significant advantages of a one-time investment is the immediate growth potential it offers. When you invest a lump sum of money, the entire amount begins working for you immediately. This means that you start earning returns on your entire investment from day one, accelerating your wealth accumulation.

Compounding Effect

Compound interest is a powerful force in finance, and a one-time investment benefits from it significantly. When your initial investment earns returns, those returns are reinvested, leading to exponential growth over time. The longer your money remains invested, the more pronounced the compounding effect becomes, helping your wealth grow even more.

Reduced Emotional Stress

Investing can be emotionally challenging, especially when markets are volatile. Periodic contributions require constant decision-making about when to invest, which can lead to emotional stress. In contrast, a one-time investment involves a single decision, reducing the emotional burden associated with timing the market.

Simplified Portfolio Management

Managing an investment portfolio with periodic contributions can become complex as you need to rebalance your holdings and track multiple contributions continually. With a one-time investment, portfolio management becomes more straightforward. You can focus on periodic reviews and adjustments, if necessary, rather than managing frequent transactions.

Peace of Mind

Knowing that you have made a single, substantial investment can provide a sense of peace and confidence in your financial future. You don’t have to worry about consistently setting aside funds for investments, which can free up mental space for other financial goals or life pursuits.

Factors Affecting the Decision of One-Time Investment

One-time investments involve committing a substantial amount of money at once, as opposed to periodic contributions. Deciding to make a one-time investment can be a significant financial decision, and various factors come into play when making this choice.

Financial Goals

The purpose of your investment can range from saving for retirement, buying a home, funding your child’s education, or simply growing your wealth. Clearly defining your objectives will help determine the amount of risk you are willing to take, your investment horizon, and the assets in which you should invest.

Risk Tolerance

Risk tolerance refers to your ability and willingness to endure fluctuations in the value of your investments. If you have a high tolerance for risk and can weather market volatility, you may be more inclined to make a one-time investment in riskier assets like stocks or cryptocurrencies. Conversely, if you have a low-risk tolerance, you may opt for safer investments like bonds or certificates of deposit.

Time Horizon

investment horizon should align with your financial goals. Longer time horizons often allow for a higher degree of risk since you have more time to recover from market downturns. Short-term goals may necessitate a more conservative approach, focusing on capital preservation rather than aggressive growth.

Market Conditions

Markets can be highly volatile, and timing your investment can be challenging. Attempting to enter the market during a downturn may offer opportunities to purchase assets at lower prices, while investing during a bull market might require careful consideration to avoid overpaying.

Asset Allocation

Asset allocation refers to the distribution of your investment capital among different asset classes, such as stocks, bonds, real estate, and cash. Depending on your risk tolerance and financial objectives, you may opt for a more aggressive allocation with a higher percentage of stocks or a more conservative approach with a greater allocation to bonds and cash.

Diversification

Diversification involves spreading your investments across various assets and sectors to reduce risk. A well-diversified portfolio can help mitigate the impact of poor-performing assets and increase the potential for overall returns. When considering a one-time investment, assess the level of diversification in your portfolio to ensure it aligns with your risk tolerance and investment goals.

Which Scheme is Best for a One-time investment?

There are a multitude of investment options available in the market, each with its unique set of advantages and disadvantages. To determine which scheme is best suited for your one-time investment, it Is essential to consider factors such as your financial objectives, risk tolerance, time horizon, and the current economic climate.

Here are some of the most popular schemes that you can consider for a one-time investment.

Unit Linked Insurance Plan (ULIP)

A Unit Linked Insurance Plan (ULIP) is a unique insurance product that combines the benefits of life coverage with the opportunity for investment growth. With ULIPs, you can have the flexibility to allocate a portion of your premiums into various investment funds, such as equity, debt, or balanced funds, allowing you to potentially accumulate wealth over time while securing financial protection for your loved ones.

ULIPs allow you to switch between investment funds several times during their five-year lock-in term. Additionally, contributions made to ULIPs are tax deductible under Section 80C.

Public Provident Fund (PPF)

The Public Provident Fund is a government-run investment scheme with a 15-year lock-in term. Every year, the income generated on your investment is compounded, resulting in attractive returns at maturity. You can invest a maximum of ₹1,50,000 per financial year, with a minimum of ₹500. You can invest in a bulk sum or on a monthly basis. After five years from the date of the initial investment, partial withdrawals are permitted. You can claim income tax deductions under Section 80C, which has a maximum cap of ₹1,50,000 each financial year if you invest in PPF.

PPF is a good investment option for people who are looking for a safe and secure way to save money and grow their wealth over time. It offers guaranteed returns, tax benefits, and flexibility.

Real Estate

For many people, real estate has long been the preferred one-time investment plan. Even now, rates are rising, making real estate a profitable investment. Moreover, when compared to other financial instruments, most people believe it is a safer alternative. Real estate offers the safety of physical property along with higher returns in the long run.

Fixed Deposits (FD)

Bank fixed deposits are the most popular, low-risk, best one-time investment plan with high returns in India. The returns are guaranteed, allowing you to invest for longer periods. Even though the interest rates are lower than those offered by other investments, many people prefer it. The FD’s interest rate can be configured to be paid monthly, yearly, weekly, or even daily.

FDs are a popular investment option in India due to their low risk, guaranteed returns, and flexibility. They are a good choice for investors who are looking for a safe and secure way to invest their money and earn a regular stream of income.

Gold ETFs

Gold bullion is purchased through gold exchange-traded funds (ETFs). These ETFs monitor domestic gold prices and are passive investments. They are a substitute for buying real gold. They are available in digital form. Each unit of the Gold ETF is one gram of gold and is backed by 99.5% pure gold. On stock markets, gold exchange-traded funds are traded. A Demat account and a trading account are required to buy and sell them because the purchase and redemption take place on an exchange.

Gold ETFs are a good investment option for those looking to invest in gold without the risk and expenses of storing physical gold. They are also taxed less than real gold, making them a more attractive option for investors looking to earn profits and reduce their tax obligations.

Final Thoughts

So, anyone who has a respectable amount saved up can choose one-time investment programs with ease.

Numerous one-time investment plans with high returns are available in the market, each tailored to a specific goal and risk profile. Of course, every investor is different, and the ideal investment for you is determined by your time horizon, the amount of capital you are ready to invest, your risk tolerance, and your willingness to diversify your portfolio. Fortunately, there are plenty of resources available to assist you in finding your investing match. You can use online platforms to find the top mutual funds in India or even seek professional advice!

Key Takeaways

  • One-time investment plans involve investing a lump sum amount in one go into a particular scheme for a predetermined duration.
  • These investments offer several advantages, including immediate growth potential, simplified portfolio management, and peace of mind.
  • Factors to consider when deciding to make a one-time investment include financial goals, risk tolerance, time horizon, and market conditions.
  • Some of the most popular one-time investment plans in India include ULIPs, PPF, real estate, fixed deposits, gold ETFs, and bank fixed deposits.

- A Consumer Education Initiative series by Kotak Life

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

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