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6 Best Investment Plans in India for Middle-Class Families in 2021
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Which is the best Investment Plans in India for middle class families in 2022?

The entire world is reeling under the pressure of the COVID-19 pandemic, and people are scrambling to make ends meet amidst continuous lockdowns. With salary cuts being implemented across all sectors, the fear of job loss looms large among the Indian middle class. It is estimated that the middle class makes up 28 percent of the total Indian population which is also the worst affected income group during the pandemic. But all is not over yet. By being aware of the best investment plans in India, it is possible to build a decent financial corpus that will help you during tough times.

Rajeev was an IT analyst with a start-up company with three years of experience. He has been with this company since his graduation and was hoping to stay with them for another two years. But the COVID-19 pandemic struck his start-up so hard that he was laid off as projects dried up. Rajeev felt his entire world crashing down as he had recently taken a home loan for an under-construction apartment. Being a commerce student, he knew the value of savings and had researched various short-term investment options along with long term-investment plans to invest his salary. He started putting a fixed sum of money into equity mutual funds every month. With no job and the necessity to make EMI payments, Rajeev redeemed a portion of these savings to ensure no default in loan repayments. With the help of these funds, he was able to manage the expenses for seven months, after which he got a job offer from a more prominent MNC. He was grateful for having started mutual funds’ investments at an early age, without which he wouldn’t have been able to manage the expenses during the pandemic period.

6 Best Investment Plans for Middle-Class Family in India for 2022

Here is the list of the top 6 investment options for middle-class families in India to get high returns on their investments with minimum risk in 2021 as mentioned below:-

  1. Savings Account
  2. Fixed Deposit
  3. Corporate Deposit
  4. SIP in Equity Mutual Funds
  5. Stock Market
  6. Gold Bonds


A glance at the middle class’s investment plans and their returns is provided in the following table for better understanding.

Top Investment Plans for Middle-Class Family in India with their Returns

Investment Type Duration Approximate Returns
Savings Account No tenure 3 – 4% p.a.
Bank Fixed Deposits (FD) 7 days to 10 years 2.5% – 5.5% p.a.
Corporate Deposits (CD) 1 to 5 years 6 – 8% p.a.
SIP in Equity Mutual Funds 3 to 5 years 8%-15% p.a
Stock Market 3 to 12 months 10 – 50%
Gold Bonds 12 to 36 months 2.50%


1. Savings Account

The simplest form of savings is by opening a savings account in any of the banks in India. Just start putting whatever tiny amount you have in this account that collects interest of 3-4% p.a It is highly liquid and can be withdrawn at any point of time from the nearest ATM. It is one of the safest avenues to park your cash, but the returns are not that huge compared to other options.

  • Rate of return: 3-4% per annum
  • Term available: Not applicable
  • Taxation: The savings interest is added to your income and is taxed as per your income tax slab.


2. Fixed Deposit

This is the most famous among all investment plans in India as FDs are offered by all banks across India, making it the easiest method to start investing for future requirements. Once you open a fixed deposit, the chosen amount has to be invested for a specified period ranging from 7 days to 10 years for a fixed rate of return. After maturity, the invested amount along with interest is available for withdrawal. Though the taxes levied on fixed deposit returns eat up most of the returns, it is still one of the safest investment instruments for the middle class to invest their hard-earned money.

  • Rate of return: 2.5% to 5.5% per annum
  • Term available: 7 days to 10 years
  • Taxation: The FD interest is added to your income and is taxed as per your income tax slab.


3. Corporate Deposit

The deposits corporates collect to fund their operations, and expansion plans are called corporate deposits. They work similar to bank FD’s, but the returns are slightly higher than banks. The risk is also generally high as private companies collect the deposits, and there is a chance of default if things do not work according to their plans. These are very much suited to people who have a higher risk-taking capacity and are also looking for higher returns but do not want to invest in stock markets.

  • Rate of return: 6% to 8% per annum
  • Duration: 1 to 5 years
  • Taxability: The interest from the corporate deposit is added to the income and is taxed as per the individual’s prevailing income tax slab.


4. SIP in Equity Mutual Funds

With increased awareness among the public about stock market investments, Systematic Investment Plans (SIP) are picking up interest among the middle class primarily because of the handsome returns generated by stock markets in the past couple of years. If you have the patience to wait for your investment to grow in the longer term, this is the best investment option available. The possibility of starting a SIP as low as Rs 500 every month also makes it an attractive option for those in middle age and have an appetite to digest risk. It is advised to start a SIP in equity mutual funds and continue it for at least a year to see the results visibly as stock markets perform well in the longer term.

  • Returns: 8% to 15% per annum
  • Duration: 6 months to 5 years
  • Taxability: The returns from mutual funds are taxed after calculating the short-term capital gains and long-term capital gains and based on the holding period.


5. Stock Market

Are you a high-risk taker and want to enjoy huge returns on your investment? Stock markets are the right tool for you in that case, as they can help you double your investment by investing in the right companies. Although there are chances to lose your entire capital, it is also one of many of the most favored investment plans to grow your money.

  • Rate of return: 10% to 50% per annum
  • Duration: 1 month to 5 years
  • Taxability: Returns are added to your income, and tax is calculated as per your income tax slabs.


6. Gold Bonds

Gold is one of the most favored investment options for the middle class in India, as it holds a lot of value and purpose in Indian families. The returns on gold are generally high and are also the safest asset class to park surplus money. Gold is usually purchased in the form of ornaments, coins, or bars that need secure storage, but another such as gold bond can be bought digitally, but still, the returns are linked to original gold.

  • Rate of return: based on gold prices. Gold bonds offer 2.5% interest on invested amount semi-annually.
  • Duration: 1 to 3 years
  • Taxability: The interest from gold bonds is added to your income and is taxed as per the individual’s income tax slab.

The power of savings can be understood only during your struggling days. Those who belong to the middle class have the capacity to move up to the next stage only if they plan their finances properly. If not, there is a chance for their finances to slip into the red zone as well. With each of the investment plans explained in detail, it is up to you to choose the correct option that suits your goal and start investing.

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