Best avenues for lump-sum investment

As we know, financial stability is the key to a successful and stable life. But does anyone know how that’s done? Well, it is no rocket science. All you have to do is look for investment options that encourage you to make the right use of your hard-earned money. A right nudge from the best investment avenues in the market will help you to grow your wealth over time. 

If you have surplus money on you at the moment, don’t let it sit idle for a long time. The wise thing to do is look for the right investment option to grow the funds that may help you get a step closer to your future financial objectives. To help you get started with this, we’ve put together four investment options. Let’s take a look: 

  • Mutual Funds 

If you’re looking for a lucrative way of investment, this is it! You can invest a lump sum amount in mutual funds through various means for better returns. 

One of the significant advantages of investing a sizeable amount in mutual funds is that its gains are linked to the market performance of the funds invested. When you stay invested for a longer-term, it comes as a surprise how much you have earned despite the market fluctuations. 

  • Immediate Annuity Plan 

Investing in an immediate annuity plan is a simple way of receiving regular income. It is known to offer you an income for as long as you live. It is generally ideal for people who are approaching their retirement. 

When you invest in an immediate annuity plan, you can also avail tax benefits under it. The premiums paid towards the plan can be claimed for a tax deduction of up to Rs. 1.5 Lakh under Section 80CCC (the limit is combined with the deduction under Section 80C) in the given financial year. 

  • Short-Term Debt Funds 

As the name suggests, in the short-term debt fund, you stay invested for a shorter duration. However, the money you invest in this scheme remains untouched for at least five years. 

It is recommended to split your lump sum cash into small investments that will help you take advantage of the cost averaging approach. Short-term debt funds are ideal for investors with a low-risk appetite. If you have a high-risk appetite, consider investing in equity-oriented funds. 

  • Senior Citizens Savings Scheme (SCSS)

Investing does not have an age limit. So, even someone above the age of 60 years, can make investments and reap its benefits. One of the recommended schemes for senior citizens is the Senior Citizen Savings Scheme (SCSS). It is a government-backed investment scheme primarily for senior citizens who are in need of a steady income.  SCSS provides a regular income with the highest safety and tax-saving benefits. 

Under SCSS, you can claim a tax deduction up to Rs. 1.5 Lakh under Section 80C of the old income tax regime. In addition to this, the annual interest income is eligible for a deduction up to Rs. 50,000, along with other bank interest income. The remaining amount will be taxable as per the income tax slab rate. One can use lumpsum calculator to calculate the expected return on their investment before investing in mutual funds.

In a nutshell, choosing a lump sum investment is a personal decision. So, make the right move only after analysing your current financial stability, investment goals, and risk appetite. All we can tell you is to seek professional help whenever needed, especially when it comes to your investment. Happy investing!