What is the best investment plan for 2 lakhs?

The best investment plan for 2 lakhs depends on your financial goals, risk appetite, and investment horizon. For short-term safety, fixed deposits and debt mutual funds are good options. For long-term wealth creation, equity mutual funds and SIP plans are ideal. ULIPs are suitable if you want insurance plus investment benefits, while pension plans help with retirement planning.

Can I invest â¹2 lakh in a fixed deposit?

Yes, you can invest â¹2 lakh in a fixed deposit. It is a safe and predictable investment option, especially suitable for short-term investment plans like 1 year. Fixed deposits offer guaranteed returns with low risk investment option.

What are the benefits of investing in ULIPs?

ULIPs provide the dual benefit of life insurance coverage and investment in market-linked funds (equity, debt, or balanced). They offer flexibility to switch funds, tax benefits under Section 80C, and potential for wealth creation along with protection. However, they have a lock-in period of 5 years.

How do SIP plans work for a â¹2 lakh investment?

SIP (Systematic Investment Plan) allows you to invest smaller amounts regularly (e.g., monthly) into mutual funds or market linked funds schemes. Instead of investing â¹2 lakh lump sum, you can spread it over time to reduce market timing risk and build wealth steadily. SIPs promote disciplined investing and are suitable for long-term goals.

2 Lakh Investment Plan

Investing ₹2 lakh wisely can set the foundation for financial security and help you achieve short-term or long-term goals. Whether you are looking for the best investment plan for 2 lakhs, seeking safe returns, or aiming for higher growth, there are multiple investment options available to suit different needs and risk profiles.

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Best Investment Options for ₹2 Lakh

Fixed Deposit (FD)

A fixed deposit is a popular investment plan for risk-averse investors. It offers guaranteed returns at fixed interest rates, making it ideal for those seeking capital protection. For a short-term investment plan, a 1-year FD can be an attractive choice, with banks and post offices offering competitive rates.
- Typically ranges from 6% to 7% per annum for 1-year tenure
- Premature withdrawal allowed (with penalty)
- Investors seeking safety and fixed returns
Debt Mutual Funds

Debt mutual funds invest in government securities, corporate bonds, and money market instruments. They are suitable for short term investment plans, offering better returns than savings accounts and FDs, with relatively low risk.
- Types include liquid funds, ultra-short duration funds, short-term income funds.
- Generally 6%–8% per annum.
- Investors needing liquidity and slightly higher returns than FDs.
Equity Mutual Funds

For those with a longer investment horizon and higher risk appetite, equity mutual funds can be the best investment plan for 2 lakhs. Options include index funds, multi-cap, large-cap, and mid-cap funds.
- Historically 10%–15% per annum over 5+ years.
- Investors aiming for wealth creation and comfortable with market volatility.
Systematic Investment Plans (SIP)

If you prefer spreading your investment, SIP plans allow you to invest a fixed amount regularly in mutual funds. While a lump sum of ₹2 lakh can be invested at once, SIPs help average out market volatility and build wealth steadily. You can start an SIP with as low as 500 rupees a month and grow your money to meet your future expenses.
Unit Linked Insurance Plans (ULIPs)

ULIPs combine life insurance coverage with investment opportunities in equity, debt, or balanced funds. A portion of the premium secures life cover, while the remainder is invested in market-linked funds.
- ULIPs have a lock-in period of 5 years.
- They offer flexibility to switch between funds based on risk appetite.
- Beneficiaries receive either death benefit or fund value, whichever is higher.
- Charges such as mortality and fund management fees apply.
- ULIPs suit investors who want both protection and wealth creation in one product
Pension Plans

Pension plans are designed to build a retirement corpus by investing premiums over time. They offer regular income post-retirement through annuities.
- Some pension plans also provide life cover.
- They encourage long-term savings with tax benefits.
- Suitable for investors prioritizing steady retirement income and financial security in old age.
Public Provident Fund (PPF)

PPF is a government-backed investment option with a 15-year lock-in period, offering tax-free returns and safety. While the annual maximum is ₹1.5 lakh, you can allocate a part of your ₹2 lakh here for long-term goals.
- Around 7.1% per annum (subject to change)
- You can claim tax deductions under Section 80C of the Income Tax Act.
National Savings Time Deposit Account

This post office product is a reliable short term investment plan. You can choose tenures from 1 to 5 years, with interest rates ranging from 6.9% to 7.7% as of recent updates.
- Lock-in of 6 months, premature withdrawal allowed after
- Safe, fixed returns with flexible tenure

Choosing the Best Investment Plan for 2 Lakhs

For short-term investment plans (up to 1 year), Fixed Deposits and debt mutual funds are prudent choices.
If you want the best investment plan for 1 year, consider bank FDs or liquid/ultra-short debt funds for safety and liquidity.
For longer-term goals (3–5 years or more), equity mutual funds and SIP plans can offer higher growth potential.
Diversifying between these investment options can help balance risk and return.

Conclusion

A ₹2 lakh investment can be tailored to your risk profile and financial goals by choosing from a range of investment plans, including Fixed Deposits, Mutual Funds, SIP plans, and government-backed schemes. Assess your needs, compare each investment option, and consider consulting a financial advisor to identify the best investment plan for 2 lakhs that aligns with your objectives and risk appetite.

FAQs

What is the best investment plan for 2 lakhs?

The best investment plan for 2 lakhs depends on your financial goals, risk appetite, and investment horizon. For short-term safety, fixed deposits and debt mutual funds are good options. For long-term wealth creation, equity mutual funds and SIP plans are ideal. ULIPs are suitable if you want insurance plus investment benefits, while pension plans help with retirement planning.
Can I invest ₹2 lakh in a fixed deposit?

Yes, you can invest ₹2 lakh in a fixed deposit. It is a safe and predictable investment option, especially suitable for short-term investment plans like 1 year. Fixed deposits offer guaranteed returns with low risk investment option.
What are the benefits of investing in ULIPs?

ULIPs provide the dual benefit of life insurance coverage and investment in market-linked funds (equity, debt, or balanced). They offer flexibility to switch funds, tax benefits under Section 80C, and potential for wealth creation along with protection. However, they have a lock-in period of 5 years.
How do SIP plans work for a ₹2 lakh investment?

SIP (Systematic Investment Plan) allows you to invest smaller amounts regularly (e.g., monthly) into mutual funds or market linked funds schemes. Instead of investing ₹2 lakh lump sum, you can spread it over time to reduce market timing risk and build wealth steadily. SIPs promote disciplined investing and are suitable for long-term goals.

˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

Past 10 Years' annualised returns as on 01-04-2025

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).

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