“Do not save what is left after spending, but spend what is left after saving” is what Warren Buffett uttered being one of the richest investors in the world. But for the middle-income group people, it is not always possible to save after maintaining daily life expenses and thanks to the inflation for taking away even the smallest amount that one middle class or upper-middle-class people could save. But as we all know saving is important and if a person saves a little amount of money over a longer period of time with proper planning and in the right investment vehicle (financial instrument), he or she can actually reap good returns.

Best Investment Options For 1 Lakh Rupees

So, here are ten such investments which would reap good returns in the future, even if you invest amount under 1 lakh rupees. You can also start low investment business with good returns in short period of time. Here are some profitable businesses under 1 Lakhs


10 low-cost investment options with good returns are as follows:-


  • Government Securities:

When you have a corpus of 1 lakh rupees, you would always want it to invest in something that is secure and not much volatile though that is not the scenario for everyone. But for them who want their investment to be secure and earn a return of around 5-8%, they can choose government securities which include various types of investments like treasury bills, dated government securities or the cash management bills etc. RBI issues Zero coupon bonds, capital indexed bonds and floating rate bonds which are also a very secure investment for the people looking to invest 1 lakh rupees and earn good returns. Moreover, there is no tax the investor has to pay on the investment, these are tax-free.


  • Capital Guaranteed products:

Even after tax deduction, these funds are observed to produce a return of 9-10% and since these funds offer a guarantee or protection of your capital (in this case 1 lakh rupees) which you have invested, it is regarded as one of the most intriguing investment for the small investors. Every investor who has small corpus is always worried about their money being lost but in this capital guaranteed products, your capital is intact and there will be no change to that according to the market. Even if the market return is nil or negative, your capital will be safe.

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  • Bank FDs:

Fixed deposits interest rates are currently trending little lower than usual with the minimum being 6.25% in the nationalized banks where it can go down to even 2% in the privatized ones. The maximum interest rate provided by the banks on fixed deposit at present time is near about 7.5% and all these rates vary according to the amount invested and the tenure of the deposit. But at any given point in time, FDs are good for small investments for the risk-averse people. It is a simple and effective way to invest your money without much calculation and financial advice.

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  • Investment-linked Insurance plans: 

ULIP or Unit linked investment plans which actually mix of insurance and investment both are one of the best investment under 1 lakh of the corpus. You can choose the underlying investment products which help you secure your investment a little more and you are also getting the insurance cover for casualties.


  • Asset Backed Securities or Corporate Bonds:

Corporate bonds are issued by the Public Limited companies to accumulate funds to run their business. This is a debt capital hand the bondholder is a creditor of the company. This is a secure investment though not as secure as the government bonds but has a high return on investments. SEBI is regulating the corporate bond market lately in India and in 2018’s budget, there are mandatory changes made to these market making it more investment-friendly. One can invest in it through the National Stock Exchange or the BSE where corporate bonds are traded.

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  • Investment In Equities:

If your knowledge of share market and also the courage to take up risky investments, then with 1 lakh of rupees as the invested amount you can actually earn a lot. In the last 5 years, markets were hugely volatile and there is an upsurge in the market. If you see past one month’s data, there is an increase in the investments. But in this market, your return depends on the share you have purchased, there is no lower or upper limit to the return on investment.

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  • Mutual Funds:

For them who are interested to invest in the stock market but not have enough information or knowledge about, they can go for the mutual fund investment. If you have time period more than 5 years, 1 lakh rupee can get you good return within the time horizon. There are different kinds of mutual funds which vary according to the type of its underlying investments or the assets. Few of the mutual funds are more into equities where some others are more into the secured funds like government bonds etc. The return is generated on the basis of market return and the performance of the underlying assets.

  • MIS:

This is Monthly Investment Scheme which you can find in any post office or government banks, where you can invest your 1 lakh rupees, and the current rate of interest is 7.5% which you will receive. You can withdraw the interest every month or you can reinvest it which is automatically done if not withdrawn to accumulate a huge corpus.

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  • Gold ETFs:

 Buying gold directly is still a process of investment for many households for the adverse times. But you can also buy the Gold ETFs which generate almost a return of 20% and more as observed in the past years. The investment horizon is 5 years and more. There are different banks and financial institutes which offer Gold ETFs.

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  • Real estate:

 You might be thinking 1 lakh rupee is too small to invest in the Real estate but if start investing in the small real estate ventures and get into a partnership, the return can be good in the long run. Moreover, you can also invest in the Real estate equities which are in demand for their constant increase in the value.