7 Best Investments for Employees in 2023-24

As a salaried employee in 2023, there are multiple options to create wealth with investments that have made the mainstream media in 2023. Employees are always looking for the smartest ways to invest their hard-earned money. Just as the most successful investor Warren Buffet says, “Never depend on a single income. Invest to create a second source“. Remember, the first rule of investing is that one should not place all his eggs in one basket. It is always better to diversify your investments because the risk factor is lessened. The following investments are best suited for salaried employees in 2023-24:

1. Equity

With the rise of discount brokers in recent years, buying stock has become extremely easy. One can just create a Demat Account with the best equity broker in India in just a few minutes and start investing the very same day. Goodwill Wealth Management is one of the best share brokers in India that people can use to start their trading journey. Though investing in equity involves high risk, the returns are also higher than any other investment alternative. Moreover, smart planning and holding on to the stock for the long-term is the most logical solution to creating maximum wealth. A person can invest in equity with minimum capital. A small-time investor only needs ₹100 or lesser to invest in the stock market.

2. Systemic Investment Plan

Systemic Investment Plan (SIP) is an investment alternative offered by Mutual Funds. A person can invest a fixed amount in a Mutual Fund scheme at regular intervals like once a month or once a quarter, instead of making a one-time lump-sum payment. The instalment can be as little as ₹500 a month and is very similar to a recurring deposit. Generally, mutual funds are sought as the best platforms for investors to get benefits from capital appreciation from the equity markets. This helps investors who are not confident in handling their own money in the market or doing their research.

3. ELSS

An Equity Linked Saving Scheme (ELSS) is an open-ended equity mutual fund that essentially invests in equities and equity-related products. ELSS is the only kind of mutual fund eligible for tax deductions under the provisions of Section 80C of the Income Tax Act, 1961. A person can claim a tax rebate of up to 1.5 lakh and save up to ₹46,800 a year in taxes by investing in ELSS mutual funds. These funds come with a lock-in period of just three years, which is the shortest among all Section 80C investments. Although the returns are little compared to the returns of direct equity investment, the tax-saving part makes up for it, especially for salaried employees that fall in the higher tax bracket.

4. Employee Provident Fund 

If you are a salaried employee, then you must have come across the term Employee Provident Fund. This is one of the most crucial investments for you. It is an exclusive retirement planning fund where the employee and employer contribute 12 percent of the basic salary amount in the employee’s provident fund account every month. As a salaried individual, you can claim a tax deduction on the contributions you make to your EPF account. The maturity amount and interest income from EPF have been exempted by the Income Tax. EPF is a very important investment option to have for an employee in the private sector in India.

5. Gold

Gold is one of those investments that hold a sentimental value in the Indian culture. Indian women hold about 11 percent of the world’s gold. The reason is that gold requires no direct paperwork, has high liquidity, and has high inflation returns in the long term. During the downfall of the equity market, gold investments provide a good hedge as the prices shoot up. Gold is also seen as a great investment to pass on to the next generation, which is part of the Indian tradition.

6. Real Estate Investment

Buying a house and having a place to call home is part of every Indian’s dream. Though real estate investment is not possible for a fresher or an employee with a limited salary, real estate can be a good investment option for a moderate or high-paid employee. For example, if an employee in his 30s decides to buy a house for ₹ 70 lakhs, he can pay ₹ 20 lakhs as a down payment from his savings and the rest of ₹ 50 lakhs will be borrowed as a home loan with interest. Here he will have to pay for the home loan with EMI. So, he will get the house in his 60s when the home loan tenure is complete. Real Estate Investment Trusts (REITs) are another great investment option for employees. In India, Real Estate Investment Trusts were introduced by the Securities and Exchange Board of India (SEBI) in 2007. SEBI came out with revised regulations for REITs, which were approved on September 26, 2014. REITs have multiple benefits for investors. REITs provide a regular income stream along with reduced portfolio volatility and dividends and wealth accumulation. It provides great liquidity since it is a listed entity, it can be easily bought and sold. Another important factor is that it is a natural hedge against inflation as returns have been seen to consistently surpass the Consumer Price Inflation.

7. IPO (Initial Public Offering)

IPO or Initial Public Offering is when the first time a privately-owned company offers its shares for sale to the public and enters the stock market, which is also known as going public. Investing in an IPO can be very lucrative if one can pick the right company at the right IPO stage. As an employee, one should have the patience to hold the correct IPO stock. Many early investors of the IPO of companies such as Infosys, TCS, and Eicher Motors have made crores of returns by investing just rupees ten thousand or lower.

Closing Thoughts

Today, we have gone through the multiple investment options for a salaried employee. Although investing in stocks, mutual funds, and IPOs are more rewarding, the chances of investing and having lesser returns are higher since the risk allocated to these type of investment options are higher. It is important that an employee needs to diversify their portfolio so that they decrease their risk factors. It is one of the first important rules of investing. The most important of all is to never invest in something that you do not understand. Furthermore, one can start investing right away in Indias best equity broker firm, Goodwill Wealth Management. Goodwill provides the lowest equity brokerage in India with a free-of-charge Demat Account opening. What are you waiting for? Start your investing journey with Goodwill.