HomeBlogUncategorizedBest Investment Plan in India for the Middle Class- 2023

Best Investment Plan in India for the Middle Class- 2023

Best Investment Plan for Middle Class

Introduction To Best Investment Plan For Middle-Class

Investing your hard-earned money wisely is crucial, especially for the middle-class individuals in India who aim to grow their wealth and secure a better future. With numerous investment options available, it’s essential to understand which plans suit the individual’s needs, considering factors like minimum investment amount, risk appetite, time and effort required, and volatility.

In this blog, we will explore some of the best investment options for the middle class in India, highlighting their features, benefits, and suitability for different salary ranges.


When it comes to choosing the best investment plan for the middle class, it is important to consider options that offer a balance between safety and potential returns. Here are some investment avenues that are suitable for salaried individuals

How to Plan Your Investment

To maximize your investments and achieve your financial goals, it is important to follow a systematic approach:

  • Set Clear Goals: Identify your short-term and long-term financial objectives. If your long-term goal is to buy a house, your short-term investments should be in Fixed Deposits (FDs),Public Provident Fund (PPF),Mutual Funds and National Pension Scheme (NPS).

To know more about different investment plans check out best 1 year investment plan

  • Understand Risk Appetite: Risk appetite refers to an individual’s willingness and capacity to take on risk when investing. Risk tolerance can be assessed considering factors like age, income stability, and personal preferences.

    Younger individuals usually with a stable income and a longer time horizon may have a higher risk appetite. On the other hand, individuals nearing retirement or with financial obligations may have a lower risk appetite. Understanding your risk tolerance allows you to select investments that align with your comfort level, striking a balance between potential returns and the risk involved.

  • Plan for Diversification: Diversification is a strategy that involves spreading investments across different asset classes, such as stocks, bonds, real estate, fixed deposit, SIP and many more. By diversifying your portfolio, you reduce the risk of being overly exposed to a single investment or asset class.

    Diverse asset types might potentially experience diverse levels of risk and return, and they may behave differently depending on the state of the market. With diversification, profits can be maximised and volatility’s effects can be reduced. It is important to allocate investments based on your risk tolerance, goals, and time horizon.

  • Regular Monitoring: Regularly monitoring your investments is essential to track performance, align with goals, and make informed decisions. Review investment performance, track market trends, and stay informed about market conditions. Periodic reviews allow adjustments to your strategy based on evolving financial situations and market dynamics.

Top 10 Investment Options

1. FMPP (Fractional Matchmaking Peer-to-Peer Plan)

FMPP is an investment plan offered by LenDenClub that facilitates Peer-to-Peer lending, where investors can lend small amounts of money to borrowers in exchange for interest payments.

Minimum amount: The minimum investment amount starts as low as ₹10,000.

Range salary: FMPP is suitable for individuals across various income ranges who are looking to explore alternative investment options and earn additional income.

Time and efforts: Investing in FMPP requires initial setup and adding funds to invest. Once the investment is made, the platform handles the entire process, reducing the efforts required from the investor.

Risk appetite: It diversifies your investment by giving loans as low as Re. 1 per borrower to mitigate risk. Hence, achieve maximum diversification across a maximum number of loans.

Best for whom: FMPP is best suited for individuals who are willing to take on a moderate level of risk and seek higher returns compared to traditional investment options. It provides an opportunity for salaried individuals to earn passive income by lending money to borrowers.

Volatility: LenDenClub uses an Artificial Intelligence-based credit underwriting model, which uses around 600 data points to validate the borrower’s eligibility criteria and risk profiling. Hence diminishing volatility.

Returns: FMPP investors have earned upto 12% p.a. since launch

Check out our blog on the best p2p lending platforms to learn more about p2p lending.

2. Fixed Deposits (FDs)

Meaning: FDs involve depositing a fixed amount with a bank for a specific period,earning a fixed interest rate.

Minimum Amount: Varies across banks but can start from as low as INR 1,000.

Range Salary: Any range of salary can invest in FDs.

Time and Efforts: Requires minimal effort, as it involves opening an account and depositing the funds. The investment tenure is predetermined.

Risk Appetite: Low-risk investment option.

Best for: salaried individual seeking stable returns and capital preservation, particularly for short-term goals.

Volatility: Low

Returns: Returns range from 4% to 7% per annum, depending on the bank and tenure.

3. Public Provident Fund (PPF)

Meaning: PPF is a government-backed long-term investment scheme that offers tax benefits and encourages individuals to save for retirement.

Minimum Amount: INR 500 per financial year.

Range Salary: Individuals with any range of salary can invest in PPF.

Time and Efforts: Requires opening a PPF account and making regular contributions. The investment has a lock-in period of 15 years.

Risk Appetite: Low-risk investment option.

Best for: Salaried individuals looking for long-term savings and tax benefits,making it suitable for salaried individuals planning for retirement.

Volatility: Low

Returns: Returns is around 7% to 8% per annum and the interest earned is compounded annually.

To know more about long term investments, check out best 5 year investment plan in India.

4. Mutual Funds

Meaning: Mutual funds pool money from multiple investors to invest in diversified portfolios of stocks, bonds, or other securities.

Minimum Amount: Varies depending on the fund.

Range Salary: Individuals with any range of salary can invest in mutual funds.

Time and Efforts: Requires selecting the right mutual funds, investing regularly (if opting for SIPs), and monitoring the performance periodically.

Risk Appetite: Risk varies depending on the type of mutual fund (ranging from low to high).

Best for: Individuals with a long-term investment horizon, willingness to take market risks, and seeking potential higher returns and long-term wealth creation.

Volatility: Varies based on the type of fund (equity funds have higher volatility compared to debt funds).

Returns: Returns depend on the performance of the underlying investments and can vary significantly. Historically, equity-based mutual funds have averaged around 10% to 15% per annum.

5. Recurring Deposits (RDs)

Meaning: RDs allow individuals to deposit a fixed sum regularly over a specific period, earning a fixed interest rate.

Minimum Amount: Varies across banks but can start from as low as INR 100.

Range Salary: Any range of salary can invest in RDs.

Time and Efforts: Requires setting up an RD account and making regular monthly deposits.

Risk Appetite: Low-risk investment option.

Best for: Individuals looking for disciplined savings and short-term goals.

Volatility: Low

Returns: Returns are fixed and predetermined, typically lower than FDs.

6. Systematic Investment Plans (SIPs)

Meaning: SIPs allow individuals to invest a fixed amount at regular intervals (monthly, quarterly, etc.) in mutual funds. It helps in disciplined investing and taking advantage of rupee-cost averaging.

Minimum Amount: Varies depending on the mutual fund, but can be as low as INR 500.

Range Salary: Any range of salary can invest in SIPs.

Time and Efforts: Requires selecting the right mutual fund, setting up an SIP, and making regular contributions. Monitoring the performance periodically is advisable.

Risk Appetite: SIPs offer exposure to different types of mutual funds with varying risk profiles, ranging from low to high.

Best for: Individuals with a long-term investment horizon, looking for potential wealth creation through market-linked returns.

Volatility: Medium to high, depending on the underlying mutual fund.

Returns: Returns can vary based on the performance of the mutual fund and the market. Historically, SIPs in equity funds have provided returns averaging around 10% to 15% per annum over the long term.

7. Gold

Meaning: Gold investment can be made in physical gold (jewellery, coins) or through gold exchange-traded funds (ETFs) or sovereign gold bonds. It acts as a hedge against inflation and provides diversification.

Minimum Amount: Varies depending on the form of gold investment. For gold ETFs or sovereign gold bonds, the minimum investment can be as low as 1 gram of gold.

Range Salary: Any range of salary can invest in gold.

Time and Efforts: Requires purchasing gold in the desired form (physical gold, ETFs, or bonds). Monitoring the gold market and making informed decisions is recommended.

Risk Appetite: Gold is considered a relatively low-risk investment option compared to stocks or equity investments.

Best for: Individuals seeking to hedge against inflation, diversify their portfolio, or preserve wealth in the long term.

Volatility: Gold prices can be subject to fluctuations, but historically it has exhibited lower volatility compared to equity markets.

Returns: Returns on gold investment vary depending on the market conditions. Historically, gold has provided returns averaging around 8% to 10% per annum over the long term.

8. Real Estate

Meaning: Real estate investment involves purchasing properties (residential, commercial) with the expectation of rental income and potential capital appreciation.

Minimum Amount: The minimum investment amount for real estate can vary significantly based on the location and type of property.

Range Salary: Any range of salary can invest in real estate.

Time and Efforts: Requires research, property selection, legal documentation, and property management. Real estate investments require significant time and effort.

Risk Appetite: Real estate investments are typically considered medium to high risk, as they are subject to market conditions and property-specific factors.

Best for: Individuals with a long-term investment horizon, willingness to take on property-related responsibilities, and seeking potential rental income and capital appreciation.

Volatility: Real estate prices can experience volatility based on the property market conditions and various factors impacting supply and demand.

Returns: Returns on real estate investment can vary significantly depending on factors such as location, property type, rental income, and market conditions. Historically, real estate has provided returns averaging around 8% to 10% per annum over the long term.

9. Employee Provident Fund

Meaning: EPF is a mandatory retirement benefit scheme for salaried employees in India. A portion of the employee’s salary is contributed to the EPF, which accumulates over time and provides a lump sum amount at retirement.

Minimum Amount: The EPF contribution is a percentage (currently 12%) of the employee’s salary, and there is no specific minimum investment amount.

Range Salary: EPF contributions are applicable to all salaried employees falling under the EPF Act.

Time and Efforts: The EPF contributions are deducted automatically from the employee’s salary by the employer. Monitoring the EPF balance and reviewing the contributions periodically is advisable.

Risk Appetite: EPF is considered a low-risk investment, as it is backed by the government.

Best for: All salaried individuals who want to accumulate a retirement corpus through mandatory contributions and employer matching.

Volatility: EPF offers stability and relatively low volatility.

Returns: The EPF interest rate is determined by the government annually. Historically, the EPF has provided returns averaging around 8% to 9% per annum.

10. Post Office Saving Schemes

Meaning: Post Office Saving Schemes are government-backed investment options that offer fixed returns and secure savings avenues.

Minimum Amount: The minimum deposit for a Post Office Savings Account is INR 500.

Range Salary: Individuals with any range of salary can invest in Post Office Saving Schemes.

Time and Efforts: Requires opening an account and making regular deposits. Monitoring the savings and interest accrual is necessary.

Risk Appetite: Post Office Saving Schemes are considered low-risk investments.

Best for: Individuals looking for secure and stable savings avenues, especially those seeking fixed returns and convenience.

Volatility: These schemes offer stability and low volatility.

Returns: The returns vary depending on the specific scheme. Historically, Post Office Saving Schemes have provided returns averaging around 6% to 8% per annum, depending on the scheme and tenure.

Why Should You Invest

Investing offers several benefits for salaried individuals:

  • Wealth Accumulation: Investments help grow your savings over time, potentially offering higher returns than traditional savings accounts.
  •  Inflation Protection: Investing allows your money to outpace inflation, preserving your purchasing power in the long run.
  • Tax Efficiency: Certain investment options provide tax benefits, such as deductions on investments made in PPF or NPS.
  • Goal Achievement: By investing systematically, you can achieve your financial goals more effectively, whether it’s buying a car, funding a child’s education, or planning for retirement.

Where to Invest & How Much to Invest

In conclusion, when it comes to choosing where to invest and how much to invest, it’s important to consider your financial goals, risk tolerance, and investment horizon. Each investment option has its own merits and suitability for specific goals.

For conservative investors seeking stability and low risk, options like Fixed Deposits (FDs), Public Provident Fund (PPF), and Post Office Saving Schemes provide secure returns. These can be suitable for short-term savings, emergency funds, and building a retirement corpus.

For those with a longer investment horizon and higher risk appetite, options like Mutual Funds, Systematic Investment Plans (SIPs), and National Pension Scheme (NPS) offer potential for higher returns. These can be considered for long-term goals like wealth accumulation, retirement planning, and funding education.

Check out our blog – best investment plan with high returns to know more.

Additionally, options like Gold and Real Estate can serve as diversification tools and potential sources of capital appreciation over the long term.


Determining the appropriate amount to invest depends on your individual financial situation and goals. It is advisable to set a budget and allocate a portion of your income towards investments regularly. As a general rule, it is recommended to maintain a diversified portfolio, spreading investments across different asset classes to minimize risk and optimize returns.

Remember, investing involves risks, and it’s crucial to conduct thorough research, seek professional advice when needed, and regularly review and adjust your investment strategy as per changing market conditions and personal circumstances.

Note: Investment decisions should be made based on individual circumstances and risk tolerance. It is advisable to conduct thorough research and consult with a financial advisor before making any investment choices.

Disclaimer: The information provided in this blog is for educational purposes only and does not constitute financial advice. The author and the website are not liable for any financial decisions made based on the information provided.

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.



The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or investment returns. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any investment decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ investment amounts.


*P2P investment is subject to risks. And investment decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of returns received by investors

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