The First 5 Investments You Have to Make as a Beginner

Remember how you felt when you first tried to navigate the crowded streets of Mumbai or Delhi?

Investing in India can evoke the same ‘deer in the headlights’ feeling. But fear not, because just like mastering Indian traffic, investing here has its rules, and once you get the hang of it, you’re set for life.

As a beginner, where do you start? What are the safest bets to make with your hard-earned money?

Let’s cut through the noise and look at the top five investments that are perfect for getting your feet wet.

1. High-Interest Savings Account

Why Start Here?

  • Risk-Free: Provides a safe haven for your money with zero risk involved.
  • Liquidity: Allows you easy access to your funds, making it an excellent place to stash your emergency fund or short-term savings.

Best for:

  • Beginners who need a risk-free option to start saving and want immediate access to their money.

2. Public Provident Fund (PPF)

Why It’s a Must-Have

  • Tax Benefits: The PPF offers attractive tax benefits under Section 80C of the Income Tax Act, with both the principal and the interest earned being tax-free.
  • Long-Term Security: With a 15-year tenure, it’s a long-term commitment that encourages disciplined savings and offers one of the highest interest rates among fixed-income investments.

Best for:

  • Investors looking for safe, tax-efficient, and long-term saving avenues.

3. Equity Mutual Funds

Why Dive Into Equities?

  • Higher Returns Potential: Over the long term, equity mutual funds have the potential to offer higher returns compared to fixed-income investments.
  • Professional Management: Your money is managed by professional fund managers who aim to maximize returns by diversifying across various stocks.

Best for:

  • Beginners ready to take moderate risks for higher returns and those looking for an introduction to the stock markets without directly jumping into stock picking.

4. Systematic Investment Plans (SIPs) in Mutual Funds

Why SIPs?

  • Disciplined Investing: Allows you to invest a fixed amount regularly (monthly or quarterly), which instills financial discipline.
  • Market Timing Irrelevant: With SIP, you invest at different market levels, which reduces the risk of entering the market at the wrong time.

Best for:

  • Investors who want to build wealth over time without the hassle of timing the market.

5. National Pension System (NPS)

Why Plan for Retirement Early?

  • Tax Efficiency: Offers additional tax benefits under Section 80CCD, making it highly tax-efficient.
  • Diversification: The NPS invests in equities, corporate bonds, and government securities, providing a balanced exposure across asset classes.

Best for:

  • Young investors who are looking at building a retirement corpus while enjoying tax benefits.

Summary: Kicking Off Your Investment Journey with a Bang

Here’s the thing: investing isn’t just about piling up cash.

It’s about making smart choices early so you can chill later. Starting with these foundational investments in India is like planting seeds in fertile soil.

You’ve got the high-interest savings account for easy access and safety, PPF and NPS for those long-term gains and tax perks, and mutual funds and SIPs to get a taste of the stock market without getting burned.

It’s a blend that prepares you for just about anything the financial world throws your way.

So, suit up, start smart, and let’s get this money to work for us, not against us.

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Mani Karthik

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Mani Karthik

Entrepreneur, Mentor & Blogger.
I help business grow & scale. Have helped 15+ companies scale in US, Middle East and India.
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