Passive Income Ideas in India for New Investors in 2021

Passive Income Ideas in India for New Investors in 2021
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Everyone is busy learning about Passive Income Ideas in India. Today, the need of making passive income can reach to you anywhere from a social media Ad promising an idea to make money to your neighbour making good Passive income. It is always there somewhere in the background. If this is the case then why do you think you still haven’t done anything about it? What is it that is stopping you from making those extra bucks to ease your financial burden? It is probably the notion that earning Passive Income is A LOT to do which is ironic in itself because Passive Income is something for which you should not be doing much otherwise it would not be qualifying as “Passive”. You sure need to take initial efforts and invest smartly in suitable assets but it is not a lot, in fact it is the bare minimum to earn out of your wealth which, instead of growing in most cases, is de-growing. 

Now, even though your Passive Income requires minimum efforts from your side, it sure needs the right mindset to take action when necessary. It could be a simple thing like keeping a record of each penny invested in different assets or could also be something as courageous as switching the asset class according to your goals and market returns. 

Pandemic has hit the market and few economists predict the financial wrath to continue in the upcoming year as well. So, postponing the idea of investing your wealth just because there is a Pandemic is not a great idea. You must look into your finances as early and possible and find scope of investing. Few Avenues of Investment in the upcoming year, 2021 are : 

1. Investing in Debt markets 

Debt market is a one good option for investing in 2021 because of its feature of being safe and fixed. Debt funds are of all kinds i.e. treasury bills, commercial papers, corporate and government bonds, PSU and Municipality funds, which are safer as compared to equity because low volatility and being secured i.e. backed up by assets in case a company fails. 

The most common amongst all the debt funds are Bonds. Bonds have a fixed interest rate (sometimes floating) and are disbursed on a month, semi-annual basis or annual basis. This option is very good for those who do not want to get themselves in the complexity of fundamental and technical analysis of companies in order to buy their stocks, yet want higher returns than fixed deposits in their banks.

2. Rental Income

The easiest Passive Income idea in India is to earn Rental Income. This Asset class has changed a lot over time. It required a lot of funds to invest in Real Estate but not anymore, you now have REIT (Real Estate Investment Trusts in which people can invest a really low amount too. It has become a great tool to make Rental Income an accessible one for people with less funds too. 

Those who can afford to own physical real-estates and then get rental income directly from it should also go through the pros and cons of owning a particular type of property. For example, the risk of default in payment in commercial properties is very less but also requires a lot more maintenance than the residential one. So, this all should be properly assessed before making a decision of putting huge amount of money in a property. 

3. Passive interest with a high-interest savings account

 If you are somebody who likes to keep a fair share in your savings account for the purpose of liquidity or emergency, you would be well aware about the falling returns on savings accounts in India. In such a scenario, is it even a good option to keep money in a savings account? Well, yes it is. One has to know in which bank to have their savings account in order to get good returns which is also tax-free. 

The two banks that are giving 7% returns on their savings account is IDFC First Bank and Equitas Small Finance Bank. The refund are tax-free (using section 80TTA – Rs10,000 yearly expectation on savings interest) which makes it better and it is probably the easiest way to earn passive income in India as nothing can be simpler than putting the money in your savings account.

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