How to start Investing in India?
- Manan Mehta
- Nov 19
- 4 min read
If you need help with any of the following, feel free to contact us. Our team of experts will be happy to help you:
Investing and portfolio management
Spending optimization, EMIs & credit cards
Insurance advisory
Tax planning
Will & estate planning
Most other financial queries or challenges
You can also email us at help@reymanwealth.com
How to start Investing in India?
Welcome to the absolute basics of stock investing. We're going to keep things extremely simple in this series so you know exactly what you need to do without having to break your head.
This guide will help if you have a bank account and (maybe) fixed deposits but don't know what to do next.
Maybe you've heard of mutual funds, SIPs (systematic investment plans) and the stock market. Don't worry, we've got your back. This guide will be simple and tell you how to start investing in India.
Why should you invest?
Inflation & Time value of Money
Consider this carefully: You've invested approximately 17-18 years in education - whether it's 12 years of schooling plus 3-4 years of undergraduate studies, perhaps followed by 2 years of postgraduate education, or even longer for medical professionals. Add another 2-3 years of work experience, and you've dedicated two decades of your life to building earning capacity.
Yet, how many hours have you genuinely spent understanding how to manage the money you've worked so hard to earn?
This passive approach to financial education leads to decisions made by default rather than design. Following bank relationship managers' advice without question, buying policies from insurance agents because they're family friends, or simply doing nothing because the topic feels overwhelming.
We're here to break the cycle!
If you want someone to assist you with your investments and grow your wealth, feel free to contact us. Our team of experts will be happy to help. You can also email us at help@reymanwealth.com
First, let's get rid of some of your pre-conceived notions:
Buy a house: Buying a house can be a goal for your investments. But this cannot be your primary way of investing. Real estate returns have historically lagged the stock market (and even Fixed Deposits)
FDs are the safest and best: FDs are great for keep your money safe. But they often struggle to beat inflation. While FDs have a big part in your portfolio, they barely count as "investments".
Gold is the best and will always go up: We Indians love gold. Gold is a great hedge during uncertain times, but gold returns have also significantly lagged the stock market over a large period of time.
Analysis Paralysis
Where do you even begin? The personal finance world can seem like a minefield and since we humans hate taking action, it's easier to just let things happen. But like we've already agreed, we need to break this cycle and do something (literally anything). If you want to spend money to buy things you want, you have to save.
Your first step
Liquid funds
A liquid fund is a type of mutual fund that invests in short-term debt and money market instruments with maturities of up to 91 days, offering easy access and stable returns.
Basically, (to a large extent), liquid funds are safe investments which typically have higher returns than FDs or Savings accounts.
For someone at level zero, the best immediate action is moving the majority of your savings into a liquid mutual fund. This recommendation might sound counterintuitive if you've been conditioned to trust only banks, but let's examine why this makes sense.
Returns Liquid funds have higher returns (6.7-7.5%) than Fixed Deposits (6-6.5%). You might think that 1% here and there won't make any difference (but it will. More on that here) Note that these numbers keep changing for both Liquid funds and Fixed deposits. The idea is just that liquid funds typically have higher returns than FDs.
Diversification Liquid mutual funds invest across a large number of different debt instruments, so if one area faces problems, your entire corpus isn't at risk. The more diversified your money is kept, the better the protection.
Flexibility
This is perhaps the most crucial advantage: withdrawal flexibility. Want to redeem only ₹5,000? You can. Need ₹1 lakh? You can withdraw that. Want to liquidate your entire investment? That's possible too. Most liquid mutual funds process redemptions within one business day.
Which Liquid Fund should you invest in?
We're providing these options only to prevent decision paralysis. There's a ton of liquid funds in the market, these are some specific ones we recommend our clients:
Parag Parikh Liquid Fund – Notable for investing predominantly in SOV-rated (Sovereign-rated) RBI papers, which represent the safest category of debt instruments available
Quantum Liquid Fund – Recommended by multiple independent analyses for conservative portfolios
ICICI Prudential Liquid Fund – A consistently performing option with strong fund management
Note: These suggestions aren't endorsements but starting points that remove the paralysis of infinite choice. As your knowledge grows, you can explore other options based on your specific requirements
Case Study:
Our client, Mr M had assets of ₹50 lakh, distributed as follows: ₹20 lakh sitting in a savings account
₹30 lakh in fixed deposits
Recommended allocation:
₹2 lakh in savings account (psychological comfort of seeing a substantial balance)
₹10 lakh in Fixed Deposits (3 FDs with similar maturity - provides ladder liquidity and emergency access)
₹38 lakh in a liquid mutual fund
What this did is kick-started Mr M's investment journey. Once the money moves out of your savings account and you're used to it, you graduate to next steps of investing in Equity Mutual Funds. (Assuming you have your emergency fund, insurance, etc in place).
If you want someone to assist you with your investments and grow your wealth, feel free to contact us. Our team of experts will be happy to help. You can also email us at help@reymanwealth.com
Comments