Long-Term Investment Options in India to Secure Your Financial Future

Long-term investment options are highly known to perform better than short-term investments. However, regardless of the condition of the market, you as a retail investor require planning properly and remaining invested to reap the benefits over the long term. Also, you as an investor must always ensure to remain aligned with the crucial life goals to make an informed decision while investing. Discussed here are some of the popular long-term financial options that you can include in your investment plan to generate long-term returns and meet your long-term life goals on time. 

Bank FD (fixed deposit)

Bank FDs are one of the most traditional investment options in India. You can invest your funds in fixed deposits for three, five or even ten years to generate a return rate of anywhere between 3 per cent and 7 per cent per annum. Once the FD term comes to an end, you can withdraw your funds. Note that FD even allows you to withdraw your savings early, however, this is allowed at the cost of a small penalty. Additionally, the FD rates are higher as compared to a savings account. 

Mutual fund investment 

Over time, mutual fund investment has become a very popular financial instrument. Such instruments are regulated by the mutual fund market and are safe for investment as per the SEBI (Securities & Exchange Board of India). There are majorly three mutual fund categories – hybrid, equity, and debt funds. The debt fund basically invests your money in government securities and corporate bonds. This is a prudent investment option for low-risk retail investors. In contrast, an equity mutual fund invests your investments in stocks and has the potential of generating higher returns than any fixed income instruments. However, as the returns in equities are associated with stock markets, it is riskier as compared to debt mutual funds. Hybrid funds, on the other hand, is a blend of equity and debt. 

Unit-linked insurance plan (ULIP)

ULIP is beneficial in meeting your distinct crucial financial goals such as arranging your down payments, forming your corpus for your retirement days, or building a corpus for your child’s higher education or marriage. Moreover, as per Section 10 (D) and Section 80 C, you can claim maximum tax deductions. ULIP option has a minimum lock-in period of five years but comes with a higher risk level than fixed-income instruments owing to its investment in equities. 

Public provident fund (PPF)

This is a scheme similar to EPF (employee provident fund). However, unlike EPF which is designed just for salaried individuals, the PPF account is for anyone willing to earn fixed income returns over the long term. Note that such schemes are held for a time period of 15 years and the prevailing rate of interest is 7.10 per cent per annum. This instrument allows you to claim a deduction on tax as per Section 80 C. 

National savings certificate (NSC)

NSC is nothing but a secured long-term financial instrument in India available in specific public sector banks and post offices. The investment time frame for this scheme is five years and you can begin saving here with an amount as little as Rs 100. The current NSC rate is 7.7 per cent per annum. 

Sukanya Samriddhi Yojana (SSY)

The Indian Government introduced SSY to provide benefits to a girl child. Through this scheme, you can deposit an amount of up to Rs 1.50 lakh per financial year until your girl child reaches the age of 15. You can withdraw the parked funds after a period of 21 years when the SSY account reaches maturity. 

Real estate

Real estate investment requires you to invest a substantial amount of funds to get started. Returns are high in real estate or property holdings if you hold for over a long time period. This investment option is popular as through this financial option, you can even avail a loan from the financial institution and then pay the mortgage by keeping your real estate asset on rent. You may even consider selling your property after a few years when the property prices rise at an exponential gain. However, there are specific risks involved too like the property prices may depreciate over time instead of rising owing to volatility in the real estate market, which may make you sell your property at a loss to meet your financial crunch. 


Investing in gold instruments is a very popular long-term financial option. You as an investor can make gold investments in the form of gold bars, gold coins, gold deposit schemes, mutual funds, gold ETFs and others. Such instruments come with a lock-in of three to seven years. 

National pension scheme (NPS)

Indian government came up with the NPS scheme to encourage long-term investment. This investment scheme ensures you a regular flow of income after retirement. You can invest in such schemes for up to the age of sixty. Post reaching the age of 60 years, a minimum of 40 per cent of your investments are used for purchasing annuity while the remaining 60 per cent is given to you in lump sum form. 

Corporate FDs (fixed deposits)

Such financial instruments are riskier as compared to bank FDs; however, the rate of interest is even high. The rate of interest ranges anywhere between 6 per cent and 8 per cent per annum. Companies provide such financial instruments to collect funds to meet their expansion and operational activities. 

What are the advantages of opting for long-term investments?

Compounding effect 

The higher the time you give your investments to grow in value, the higher the returns you generate. For instance, if you invested just Rs 500 per month at an interest rate of 15 per cent per annum, then this would enhance to around Rs 16 lakh over a time period of 25 years. 


In the case of long-term investments, you as an individual tend to suffer less owing to market fluctuations. Additionally, no one can completely predict the market movements, as an outcome, it is an excellent idea to invest for the long-term period to maximise your returns. Keeping your investments for the long term also allows you to overcome volatility that your investments may face over the short run. 

For computing the investment amount, you must invest monthly in a specific financial instrument to reach a financial goal within a specific time horizon, you can take the help of an online investment calculator.

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