India’s ever-evolving economy presents many investment opportunities for residents and those outside the country. With FDs currently offering the highest-ever returns of around 7.5%-9%, the world is turning its attention to India. A recent survey conducted by SBNRI reveals that 53% of Indians living abroad believe India offers superior investment opportunities compared to foreign countries.

It is the fifth largest economy in the world and is forecasted to grow by 7-8% in FY 2025. The Indian market is a rich landscape with opportunities ranging from traditional fixed deposits to alternative investment avenues like invoice bill discounting. The Global Competitive Index measures a country’s competitiveness based on various factors like institutions, infrastructure, macroeconomic stability, health, education, and more. India’s ranking in this index reflects its potential for economic growth and the opportunities it offers investors.

This blog will discuss the different investment avenues available in India that offer the highest returns. Let’s get started!

Best Investment Options in India

The following is the list of investment options available in India:

1. Invoice Discounting

Individual investors seeking returns beyond volatile equity investments with unpredictable returns and prefixed low FD returns must consider secured invoice discounting as part of their portfolio.

Invoice discounting is an innovative financial strategy that provides businesses with immediate capital by leveraging their sales invoices. altGraaf offers a specialised platform where individual investors can profit from this type of financing through five different products. This exclusivity of altGraaf’s products makes them a privileged investment opportunity for Indians residing in New Jersey.

Below is a brief overview of the products:

1. altWings

altGraaf connects businesses requiring working capital with individual investors through altWings. Investors invest against the receivables for a 90-day tenure for a 12.5-14% yield. altGraaf’s dedicated team of experts comprehensively analyses every company’s financial statement, cash flows, revenue earned, credibility of the company’s management, shareholding patterns, profit margins, and more. Only after a company meets altGraaf’s stringent criteria they are listed on altGraaf for individual investors, offering investors transparency and confidence.

2. altBlu

altBlu is an invoice discounting product that comes in two versions. In the first version, trade credit insurance covers 90% of the investor’s principal and altGraaf-controlled escrow account. The second version only has escrow account control. The former provides added security as insurance protection compared to the latter version. With rigorous due diligence, altGraaf ensures only creditworthy borrowers access the platform, offering investors a balanced blend of security and growth potential.

3. altArmour

altArmour enables investors to finance businesses through secured invoice discounting investment, which is secured by trade credit insurance. The insurance fully protects investors’ principal and interest if the buyer defaults. The product offers a 90-day tenure with an 11-12% yield, managed through an escrow account.

4. altSmart

altSmart enables individual investors to invest in businesses seeking funds to manage their working capital via the altGraaf platform for a 30-90-day tenure. To ensure the security of investors’ money, altSmart provides a bank guarantee with escrow control on repayments, ensuring returns even in the event of a buyer default. With altSmart’s secured invoice discounting, investors diversify portfolios with stable returns and contribute to economic growth while enjoying a hassle-free investment experience.

Like all investments, invoice discounting investments carry risks, and investors must review all investment opportunities carefully before investing. However, with these choices of invoice discounting products across the risk spectrum from very low to high risk, investors can select opportunities that align with their risk appetite and return expectations.

Primary Benefits of Investing in Invoice Discounting

Short Tenure (30 days to 90 days)
Fixed Returns
Not linked to market fluctuations
Competitive Yields

Primary Risks

Credit Risk (Ability of the borrower to repay)
Liquidity risk (Ability to liquidate before maturity)

2. Mutual Funds

A mutual fund is where a professional fund manager oversees the investment collected from multiple investors with a shared goal. The fund invests this collective capital in equities, bonds, money market instruments, or other securities. Unlike traditional bank deposits, mutual funds generally provide higher returns if held for long periods but are associated with market-linked risks and are primarily suited for long-term financial wealth creation. Investment in Mutual Funds is facilitated through NRO or NRE accounts. If you want to earn non-marketing-linked rewarding returns, you can invest in altBlu and altWings.

3. Gold Investments

Gold investments are suitable investments in one’s portfolio and protect against market fluctuations. Although gold prices have historically surged in India, let’s not forget that the inherent cost of gold also depends on economic conditions. For instance, when interest rates rise, the appeal of holding gold diminishes. Also, unlike stocks, bonds, or real estate, gold doesn’t generate dividends, interest, or rental income. The profit materialises only when the gold price appreciates and one sells. If you want to invest in a product independent of economic situations, has low risk, and is secure, altSmart could be an excellent portfolio addition.

Why should one invest in India?

Traditional investments like the 401 (k), IRA, and college savings account are a solid foundation for your investments. Once you have maxed out your investment in these options and don’t want money lying idle in your savings account, you can consider investing in India. The five innovative invoice discounting products by altGraaf offer a fresh way to boost your portfolio’s risk-adjusted performance.

Who can invest in altGraaf?

All individuals residing in India
Individuals residing outside India who have an NRO account

Conclusion

With India ranking number 1 in the Central & Southern Asia Region, it is an excellent opportunity for individuals to invest and maximise returns with managed risk. altGraaf is committed to offering individual investors access to innovative investment products like invoice discounting. These can provide higher returns on the investors’ capital. However, it’s crucial to thoroughly review all product information and understand the risks before making any investment decisions.

Frequently Asked Questions

What are the risks of invoice discounting?

There are various risks involved with investing in invoice discounting, which includes commingling risk where both buyer and seller can default on payment. Others include disputes with the insurance company, bank defaults, etc.

What are the tenure and returns of investment in invoice discounting?

The tenure of an investment offers up to 11.5% returns for 90 to 180 days.

Who can open an NRE/NRO account?

For Indians living abroad, there are two account options for managing their money in India:

NRE (Non-Resident External) Account: This account allows individuals to hold funds earned outside India in either foreign currency or Indian rupees. With NRE accounts, one can freely transfer money back to their country of residence whenever needed.

NRO (Non-Resident Ordinary) Account: This account holds Indian rupees only. However, a key factor is that once money an individual deposits into an NRO account, they cannot transfer it back to their country of residence.

Investing with altGraaf requires using funds held in an NRO account.