10 Best Investment Options for Teenager In India

When you start finding the best investment options for teenagers in India, you will find various options. Every teenager or entry-level investor wants to invest in the best investment option that offers maximum return and carries the lowest risk level. 

Some people consider investing their hard-earned money to build wealth, whereas some wish for a better return than SB accounts. This article will discuss some popular investments in India that you can consider as a teenager. 

List of 10 best investment options for teenagers in India

#1. Public Provident Fund

The public provident fund or PPC is one of India's most secured investment options. It is a highly suitable investment option for teenagers. As with very few investment amounts, teenagers can start investing money under this scheme. PPF accounts can be opened in a centralised bank or Post Office. Here investors need to invest money at least for 15 years where they get an ideal interest rate of 7.1%. 

The rate of interest can differ based on the banking institution you choose. It is a very flexible investment option, and you can set your investment amount based on your earnings. The only drawback with this investment option is that the government continuously decreases the interest rate on PPF accounts. It used to have around 8.6%, and now it's somewhere between 7.1%. 

Why invest in PPF

#1. PPF investment scheme carries the minimum risk associated with the investment. 

#2. It's the scheme backed by the central government to ensure security level.

#3. You can start investing with the minimum investment amount of Rs 500 and a maximum of Rs 1,50,000 in a year. 

#4. After meeting certain requirements, you can get a loan against your PPF account. 

#2. Mutual funds

Mutual Funds are one of the preferred forms of investment in India. There are many types of mutual funds that an investor considers to diversify the risk level and generate wealth over time. Mutual funds also work like market-linked investment options and invest in multiple instruments like debt, equity, money market, etc. The rate of return can vary based on the mutual fund you choose and the risk level you select. 

Mutual funds have mainly two types: equity mutual funds and debt mutual funds. Equity mutual funds are the type of mutual fund that invests 65% of invested value in shares of businesses in different market caps. And rest, 35% of invested money, gets utilised in debt and money market securities. In debt funds, most amount gets invested in debt securities rather than equity. 

Why Invest in Mutual Funds

#1. Mutual funds carry a diversified portfolio and have minimum risk compared to stocks. 

#2. A mutual fund plan comes with a dedicated fund manager who helps the investor make the most of wealth.

#3. This investment option also helps the investor to get a tax benefit. 

#4. It's a very simple and transparent investment option that teenagers can choose even in college. 

#3. Fixed Deposit Schemes

It's very popular among Indian investors willing to invest money in secure options and diversify portfolios. Under the FD scheme, investors get a fixed interest rate on monthly, yearly,  or quarterly basis. Banks offer cumulative and non-cumulative investment options under the FD scheme. 

In non-cumulative investment, interest is paid to the investor, but a cumulative scheme reinvests the matured interest to make more wealth from the investment. The interest rate of the FD scheme can vary from 5.5% to 6.5%, depending on the bank, age group, and investment time. 

Why Invest in a Fixed Deposit Scheme

#1. FD investment option is a secured investment option that gives financial stability. 

#2. It's easy to create an FD account, deposit a fund, and renew it when necessary. 

#3. The fluctuations in the market do not impact the FD interest rate. 

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#4. National Pension Scheme

Putting some money into NPS is good if you want to make a good living after retirement. It's the best investment option backed by the Indian government. Here the invested fund is utilised in bonds, government securities, equity and other investment options. You can choose the proportion of investment as per your choice. 

Also, the NPS scheme has two options such as auto and active. The funds are automatically invested in various investment options in an auto scheme. In an active scheme, the investor chooses the ideal investment options. Interest provided under NPS is tax-free, and you get a lump sum payment on maturity. 

Why Invest in National Pension Scheme

#1. It offers flexibility to the investor to choose from auto and active options.

#2. NPS also allows the investor to withdraw the partial fund after meeting certain requirements. 

#3. It's one of the best retirement plans that you can start at an early age. 

#4. Investors can also get a monthly pension on maturity, but the amount can be taxable as regular income. 

#5. RBI Bonds

RBI bonds are taxable and have a maturity period of seven years. If you are a teenager and need the best investment option from a trusted source, RBI bonds are the choice. Here you can get 7.75% interest every year. You can invest in RBI bonds using a Demat account with BLA or Bond Ledger Account. 

Generally, bonds are issued at Rs 1000, and investors get a certificate of holding bonds. It is available in the non-cumulative and cumulative options; you can choose the non-cumulative option to get regular income. In contrast, cumulative is good for getting higher returns over time. 

Why Invest in RBI Bonds

#1. It offers a maximum interest rate of 7.75% to its investors.

#2. RBI bonds are one of the trusted and secured investment options for teenagers.

#3. For senior citizens, a premature withdrawal facility is available once they meet some requirements. 

#6. Gold ETFs

Gold ETFs are another good investment option for teenagers to invest in India. Gold exchange-traded funds are the investment options that include both gold and stock. It can be easily purchased and sold in the instrument market. This investment option has the potential to give passive income-earning opportunities for investors.

 Also, when market risk fluctuates, Gold ETFs give a higher rate of return. Because of these reasons, during COVID-19, most investors invested in Gold funds and ETFs. 

Why Invest in Gold ETFs

#1. Gold ETFs offer high liquidity and a great investment option to diversify the portfolio.

#2. Here you can easily buy and sell this investment to generate some money.

#3. It's a very prominent investment option that can give a sustainable return. 

#7. Pradhan Mantri Vaya Vandana Yojana

We are discussing the best investment options for teenagers in India, but one day you all will become aged or would be willing to invest money for your grandpa. So, it's good to know that this investment option is accessible to senior citizens who have crossed the age of 60. This investment scheme offers a 7.4% interest rate, payable monthly, quarterly, semiannually and annually.

Here investors can get a pension from Rs 1000 to Rs 9,250 per month. Under this scheme, an investor can invest up to Rs 15 lakh. And in case of the investor's demise, the nominee can get the benefit. 

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Why Invest in Pradhan Mantri Vaya Vandana Yojana

#1. It is one of the best post-retirement investment options as it offers investors a pension.

#2. After having three years of investment, the account holder can get 75% of invested money loan. 

#3. It is a very secure investment option that ensures a pension will be provided. 

#8. Initial Public Offerings

IPOs can be the best investment option for teenagers in India. In recent times, the IPOs of Nykaa and Zomato have already made their investors wealthy. However, Some IPOs like Paytm cause losses to investors. Nowadays, teenagers are much more tech-savvy and know which company can go well with their IPOs. 

Also, there are many resources you can consider using to find out the best IPO to make money. These are the less risky and long-term investments, and teenagers can make wealthy investment decisions if they consider investing in IPOs. 

Why Invest in IPOs

#1. It's an accessible stock alternative that has arrived for the first time in the investment market.

#2. It can give maximum return compared to stock trading and FD.

#3. It's a less risky investment option as when a company does well, they launch IPOs.

#9. Post Office Monthly Income Scheme

Under the Post Office monthly income scheme, you can invest money for savings and investments. It allows you to invest at least Rs 1500 to open your account. The government backs it, and it's a very secure investment scheme you can consider. It comes in POMIS, individual, and joint account opening facilities. 

Here you also get a tax benefit, putting your month for five years to get an ideal interest rate. This investment scheme is ideal for teenagers who have gathered some savings and are willing to keep them in a safe place. 

Why invest in Post Office Monthly Income Scheme

#1. It allows the opening of joint accounts of two to three people easily.

#2. You can earn interest as a monthly income without any tension. 

#3. You can open it to save money, and on maturity, you can invest in a more profitable option.

#10. Stocks & Equity

In the long term, stocks and equity are among the best investment options for teenagers in India. Most equities are very risky, but if you properly analyse the company and do your research. You can find many good stocks to invest in that can make you wealthy over time. Most investors consider investing in stocks because these provide a better rate of return compared to mutual funds and FD. 

FD and other investments we discussed are highly suitable for beginners. If you think you have learned many things about the stock market and have already invested some money in already discussed mediums. You can consider investing in stocks to gain long-term benefits. 

Why Invest in Stocks and Equity

#1. Investors get a certificate of ownership for buying the stock of the company.

#2. It gives greater benefit compared to debt and fixed deposits.

#3. Investors can make maximum wealth using a proper investment strategy for stocks. 

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FAQs

#1. Can a Teenager Invest in Stocks in India 

If you are 18 years old and know about trading, you can start investing in the stock market. However, you can consider investing with your father and mother if you are underage. This way, you can learn about the stock market and understand how to invest money correctly. However, you must consult with parents others whenever you make an investment decision. 

#2. Which is the Best Investment Plan in India for Middle Class

If you belong to a middle-class family and have not made any investment yet. You can start with RD or FD accounts; then, you can open a PPF account or consider investing in mutual funds. If you think now you have some deposits in secure options. You can also opt for stock and equity investment. 

#3. Where to Invest Money for Good Returns in India 

Gold ETFs are one of the best investment options that can ensure good returns in the long run. However, you can also start investing money in the stock market and hold for some time to get some benefit. 

#4. What are the Best Investment Options for a Salaried Person?

If you are salaried, you can invest in IPOs, mutual funds, NPS, RBI bonds and other investment options discussed above. All of these investment ideas are suitable for salaried people. 

#5. What are the Safe Investments with High Returns in India 

Public provident funds, Fixed Deposit Schemes, National Pension Scheme, RBI Bonds, Gold ETFs, and Pradhan Mantri Vaya Vandana Yojana are some safe investments with high returns.

#6. What are Short-Term Investment Plans with High Returns in India? 

If you want to invest money for one or two years, you can prefer mutual funds, equity, and IPOs. 

#7. What are Long-Term Investment Plans with High Returns?

Some of the best long-term investment plans with high returns are stocks, IPOs, NPS, and other investment options we discussed. 

Conclusion

Investing in the best investment options like Gold ETFs, stocks, equity, mutual funds, and other securities early is a very good decision. It helps in building sustainable wealth over time and makes you financially independent. This article discussed the top 10 investment options for teenagers in India with high returns. 

You can use investment options like stocks and mutual funds for short-term and long-term investment options. But whichever option you choose, you should do proper research and analyse time to get the best benefit. I hope you know the best investments in India for teenagers. 

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