Where to invest money for good returns in India in 2020 and 2021?

Dec 17, 2020

For investors with a higher risk appetite, investing in direct equity and stock trading always sounds exciting and holds attraction. Though the equity market suffered losses at the beginning half of 2020 on the grounds of panic created by the pandemic, the market is correcting itself. The boost within the stock market was essentially due to the nation reopening and people being more optimistic about the markets opening with a boom.

Moreover, history has witnessed the stock exchange always bouncing back even after a crash, whether the Harshad Mehta scam or the 2008 crash. Direct equity is to yield exponential returns if you invest over an extended-term period.

Invest in Mutual Funds

Mutual funds are an excellent solution for investors who don’t like direct exposure to equity but want to get a diversified portfolio. Mutual funds are beneficial because –
They help you have a diversified portfolio and choose a scheme relevant to your investment preference and risk appetite. ELSS funds allow you the advantage of tax saving on your investments.
Given these benefits, the open-end fund market is another avenue that you can explore. Equity mutual funds are less risky compared to direct equity due to the diversification that they supply. Some equity funds have even outperformed the stock exchange in several instances as far as returns are concerned.

Invest in Peer-to-peer Lending

Peer-to-peer investment is direct cash lending to individuals or businesses without a financial organization participating as an intermediary within the deal. They are online platforms that match investors with potential borrowers who have registered themselves on the platform. Due diligence is administered to lower and regulate the default rate, keeping RBI guidelines in mind. 

  • The borrowers on Peer-to-peer platforms come from an outsized demographic pool, primarily consisting of salaried individuals. 
  • Peer-to-peer lending companies offer higher returns than conventional investments like mutual funds, stocks, and fixed deposit accounts.
  • An investor can earn up to net returns of 10-12%* p.a. Moreover, sustained high returns on investment make Peer-to-peer lending a sought-after investment option for investors. Across all over the world, it’s used as a diversification tool by HNI’s and institutions.
  • A mantra for default risk mitigation is the Diversification of lending amount among many borrowers. Optimal diversification vastly improves the performance of your Peer-to-peer investments also, ensuring high returns.

Invest in Fixed Deposits (FD)

This is an avenue for traditional investors who are averse to market risk and need secure and safe returns. The interest rate on fixed-income instruments, including fixed deposits, has been slashed recently, but investors still prefer these for the security they promise.

So, investors with a low-risk appetite looking for returns safe often choose fixed deposit schemes. However, dedicating an outsized portion of savings to fixed deposits can freeze your funds which shouldn’t be the case when keeping liquid funds for times of need.


Choose the investment classes to invest in wisely and earn higher returns. But better understand the avenues before selecting them, then pick suitable options supporting your investment needs, financial planning in 2021, and, most significantly, risk profile. Also, monitor your portfolio regularly so that you’ll make changes to it as per your changing financial needs and market dynamics and keep your portfolio profitable.

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