Top 5 Investment Plans for Millennial In 2024

With 2023 just around the corner, most of the people have started contemplating the best investment plans. While most of us have seen how our parents have always managed to meet all the future requirements even with the small salaries that they use to have. Now when most of the working professionals are earning well it makes sense for us to look for diversified investment plans rather than opting for traditional tax-saving fixed deposits or post office schemes.

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7.7 Crore

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Disclaimer: #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 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

As most of the millennials have a larger risk appetite they are not satisfied with fixed-income schemes that offer meager returns. The tech-savvy generation is keen towards higher risk and higher return schemes, and thanks to the internet banking and equity markets for the crucial transformation.

As per the recent reports, young investors are now more likely to invest in market-related schemes as they are a perfect combination of tax-saving and optimal returns, albeit 8-10 percent tax on capital gains. Moreover, these youngsters believe in the golden rule of early investment right from the age of 25-30, giving themselves sufficient time to build a diverse investment portfolio.

And as per the financial expert's estimation, there won’t be any big fall in the Indian markets in 2023 from the current level. All these factors in combination are bound to make 2023 a good investment year with the right investment plans/instruments; the millennials can truly encash this moment.

However taking into consideration the current financial markets, here are some personal finance tools where you can park your savings, a smart and profitable way. If you are a millennial you can consider investing in some of these best investment plans to boost your wealth-

Unit Linked Insurance Plans (ULIPS)

Starting off with ULIPs because theyoffer numerous risk involving instruments to choose from such as equity funds, debt mutual funds, or balanced funds. And if you are a safe investor you can also invest in debt funds. Along with wealth accumulation, you can avail of life insurance coverage benefits. So ULIPS are the best investment plans for most of the millennials.

Additionally, they offer benefits like tax-free withdrawal, structuring liquidity, low-cost availability, and easy switching between the funds (to avoid market risk).

Not ignoring the fact that most of the insurance companies have reduced the premium allocation charges and are also returning mortality charges at maturity. With ULIPS, investors can balance their investment portfolio by spreading their money based on their risk appetite. Insurance companies are of the opinion that with ULIPs, the portfolio returns can surge by 200-250 bps.

For example, you can invest in some of the best ULIP plans with a premium of Rs. 25,000 at any age up to 60 years and get unlimited free switches during the year. And the maturity amount is tax exempted U/S 10(10D).

Public Provident Fund (PPF)

For tenure of 15 years, it is substantial to have a compounding of tax-free interest through PPFs. It is considered as one of the best investment plans in long-term both the older generation and millennials. It serves the dual purpose of steady interest income and tax-saving investment benefits.

Even for young investors, it makes the best investment plans with an interest rate of 7.9 percent in the current financial year. The government determines the interest rate on PPF and the limit to deposit is Rs. 1.5 lakh per annum. The interest will be compounding every year and will get credited at the end of every year.

Though you do not offer quick returns, it offers decent returns along with long term stability over a span of 15 years. However, after the completion of the lock-in period of 5-years, you can also extend the tenure of investment. The best part is that once your financial requirements are met you can also take loans and withdraw your money partially.

Equity-linked Saving Schemes (ELSS Mutual Funds)

ELSS is seen as the best investment plans for the working professionals. The reason why most of the millennials opt for ELSS which is a high-risk investment option in comparison to post office schemes is because it is different from others. The difference lies in its being a diversified equity mutual fund that offers tax-saving benefits up to Rs 1.5 lakh u/s 80C of the Income Tax Act.

There is a lock-in period of 3 years in Equity-linked Saving Schemes and the majority of the investments are done in the stock market. The returns offered are 2x of what you get in FIXED DEPOSITS.

ELSS is a safer option to get higher returns, as you can control the investments as per your risk appetite. If you have higher risk appetite you can go for a larger portfolio and vice-versa. All you need is some long-term understanding of the market.

As per the past trends, ELSS funds can offer a 20 percent return on investment in the long-term, which is much higher than traditional post-office savings schemes. Even if you are investing for the first time you can consider it as it will help you diversify your portfolio in the due course of time.

National Pension Scheme (NPS)

NPS was introduced in 1999 by the Pension Fund Regulatory and Development Authority and is an extremely diverse retirement plan even for millennials. What makes is one of the best investment plans for millennials in 2023 is that it is a perfect mix of fixed deposits, equity, corporate bonds, government bonds, and liquid funds.

To get good returns you can look at one, three, and five-year plans. And the USP of National Pension Scheme is that you don’t need to manage it actively. You can avail tax-saving benefits up to Rs 1.5 lakh under the purview of Section 80C of the Income Tax Act.

Furthermore, it allows additional tax-exemption of Rs. Rs 50,000 u/s CCD (1B). You can choose to invest both in equity (75%). For these reasons, it is one of the best retirement options for working professionals this year.

Life Insurance Plans

As the standard of living has improved the current generation doesn’t want their dependents to lose out on it even when they are not around. Buying a life insurance policy never gets old – it is also one of the best investment plans for millennials. You pay the premium and your family members can continue to lead the same life. The policy amount can be used by your dependent family member to meet their future routine expenses, marriage, and to pursue higher education.

You can buy term insurance plans to meet the future financial goals without any financial distress. Moreover, you get tax exemption benefits up to Rs 1.5 lakh. For this reason, a large number of millennials are opting for term insurance plans deemed as value for the premium paid.

Long Story Short

The basic thumb rule to wealth creation is to invest in a mix of market-linked and fixed income investment schemes. Market-related investment plans are significant for generating higher returns while fixed-income plans help in accumulating wealth to meet your future financial goals. It makes sense to have a diversified portfolio which is a perfect blend of financial tools. And you can look at the above-mentioned best investment plans to diversify your investment portfolio.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer. Tax benefit is subject to changes in tax laws. *Standard T&C Apply

†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. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). 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 01-12-2024

^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
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^^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).