1. Direct Equity: In equity investments, the returns are not fixed & the risk involved is higher than other avenues for investment. Although the returns are not fixed, it is evident from history that the longer-term stock market offers good returns. The plus point of stock market returns is that the returns are inflation-adjusted.There are some prerequisites to invest in the stock market – you need to have basic knowledge about the market or advisory service of a stockbroker or your financial advisor. The investment in the market can be short-term (for weeks or months )or long-term (1 year & more).

2. Mutual Funds: Mutual fund is a financial institution that pulls the money from investors & invests it in equity, debt & bonds. If you want to dilute direct investment risk in the stock market, then MF is for you. In mutual funds, a team of money managers allocates the funds to generate returns as per the prescribed objectives of the scheme.

3. Real Estate: Real Estate investment involves investment in land & property (commercial or non-commercial). The most critical factor in real estate is location. You can generate two types of income from real estate – rentals & capital gains (appreciation of value). The only drawback of this asset class is that it is highly illiquid, meaning you cannot encash the investment in real estate quickly compared to other assets.

4. Fixed deposit: Fixed deposit in a bank is considered safer as compared to other options. This is because it offers a fixed % of returns & the % is predefined at the time of investment. The drawback of FD is that it does not give inflation-adjusted returns, unlike equity investment. The bank FD becomes safer as the FDs in the bank get an insurance cover up to ₹5,00,000 for principal & interest.

5. Commodity bullion: Investment in precious metals like gold & silver is a  traditional avenue to accumulate wealth as the value of gold & silver tends to appreciate over a period. The average return on these metals has been 8% CAGR in the last 20 years. There are various ways to invest in bullion – One can buy coins, jewelry, invest in Exchange Traded Funds (ETFs), invest in SGBs Sovereign Gold Bonds issued by RBI or through the commodities market (MCX gold contracts).

6. Other significant avenues: National Pension Scheme – It is a long-term retirement-focused investment product that PFRDA manages.  The minimum annual investment is 1,000. You can vary this amount based on your risk appetite.

PPF – Public Provident Fund – It is considered the safest option. The existing interest rate on PPF is 7.1%, which the government reviews quarterly. The interest earned on PPF, maturity amount of PPF is exempt under income tax act & the contribution to the PPF account can be claimed as a deduction under section 80C of the income tax act.