Six smart ways to build wealth with Rs. 1Lakh

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Investment or savings, which one to opt for, make people scratch their heads in a dilemma. The investment in debt instruments requires a lower investment of money. There are investment plans which can help build an individual’s future wealth. A good comparison of all the schemes along with their bank interest rates can be considered useful. There are specific schemes that are proven to be beneficial to the investors under the budget target of Rs. 1 Lakh.

Building Wealth with 1 Lakh

Even if the market has numerous schemes and policies, a middle-income earning person can build enormous wealth with one lakh rupees by investing in the following schemes. 

Equity-linked Saving Schemes(ELSS)

It is a tax saving scheme. Under this investment scheme, an individual may start with a minimum amount of Rs. 10,000 and earn up to 10% to 12% per year. The individuals having a higher risk-tolerance and long term financial plan may consider investing in this tax saving scheme. By investing in this scheme, an investor can get an exemption upto Rs. 1.5 lakhs under section 80C of the Income-tax Act. But, one thing that should be acknowledged while seeking tax exemption is that the investment amount has to be locked-in for at least three years. 

Multi cap mutual funds or balanced mutual funds 

It is an equity-based fund and has a higher risk associated with it. This scheme offers investors to invest in different market capitalization and sectors. Based on the market risk and prospects, the investor may switch to other funds based on their preference. Investing in midcap or smallcap offers the investors higher returns. It is considered a safer alternative option to invest in because it involves both equity and debt. A person can invest as low as Rs.1000 per month. So, the ones who can afford taking up higher risk may receive higher returns by investing in such schemes every month.


Investment in equity mutual funds is comparatively less to that of direct stock investment. If an individual is well acquainted with the market fluctuation and the risk associated while investing in a fund, then that person can invest a share of his income in equity. Investing in such schemes requires considerable knowledge about trading stocks. An individual may invest as low as Rs. 500 per month. The lure of higher returns is irresistible, but one should invest in this scheme after analyzing the market conditions.

Public Provident Fund:

It is a long-term investment plan where the amount can be kept locked-in for 15 years, which can be extended for five years, post maturity of the scheme. Such schemes offer interest upto 8.9% per year. A person can avail of a loan against PPF to meet short term liquidity needs. Opening a PPF is as simple as opening a bank account. The maximum loan that can be taken is 25 percent of the balance in the PPPf account of the investor. 

Company fixed deposits 

Besides the well-known post-office fixed deposits offering higher returns, the alternative company set deposit also offers higher returns of about 8.2% per year. Investing in renowned companies can be beneficial over a long period. 


The price of gold has spiked by a top percent over ten years. So, it is always considered profitable to invest in gold. Many of the banks offer gold loans in exchange for gold. The prices of the gold changes with the fluctuation in the stock market, and so, investment in golds should be done prudently. 

The schemes mentioned above are some of the few ones available in the market which can be availed by any individual as per their needs and investment plans. It is always advised to research thoroughly before getting into any investment scheme.