One-Time Investment Plans 2024: Best Options in India

The one-time investment plan is a financial product that will assist you in investing lump sum money only once and reap the benefits over some time. The corpus amounts for these products can be very large and, therefore, suitable for those with a large corpus to invest but who need more time and expertise to manage their investments actively. One-time plans come with a fixed tenure, usually 3-5 years, and offer assured returns during the investment period. In this blog, we will discuss one-time investment plans, key features of the single premium policies, top plans available in India, advantages of investment in them, and things to remember while choosing a plan. Read further to determine whether a one-time investment plan would make sense.

What are One-Time Investment Plans?

A one-time investment plan or the name tells you everything, is the type of investment plan where you just put the money in a lump sum. Many leading fund houses and insurance companies offer one-time investment products that provide fixed returns over a predefined tenure.

Key features of One-Time investment plans are:

Lump sum investment: Only a fixed amount is invested once. Additional investments during the tenure are generally not allowed.
Fixed Return: The returns offered are fixed and predetermined. So on remaining invested till the maturity period, one can expect returns to get assured.
Fixed tenure: One-time plans come with a specific tenure for investment, which could be 3, 5, or 10 years. Your money stays locked in for the entire tenure.
Low risk: Plans under this category largely invest in debt instruments and, hence, are comparatively lower in risk than equity funds. Capital protection, to the extent offered under different plans.

In brief, a one-time investment plan allows the investor to invest a lump sum amount for a fixed tenure to get determined fixed returns.

Best One-Time Investment Plans in India

Here are some of the best one-time investment plans that the top fund houses in India offer:

ICICI Prudential One Time Bond Fund: Offers returns at 5.29% for 3 years and 7.20% for 5 years, respectively. The sources are in debt instruments with high credit ratings and outstanding credit.
DSP Credit Risk Fund Direct Plan Growth: Offers returns at 10.2% for 3 years and 8.1% for 5 years, respectively. The sources are in debt instruments with high credit ratings and outstanding credit.
Aditya Birla Sun Life US Treasury 1-3 year Bond ETFs FoF Direct-Growth: The Portfolio entails lower-risk bonds with a return rate of 1.4% since inception.

Compare returns across tenures, credit quality, liquidity, lock-in rules and taxation to choose the plan that best suits your investment needs and risk appetite.

Advantages of One-Time Investment Plans

One-time investment plans come loaded with many benefits that make them a lucrative investment option:

Fixed, assured returns: Pre-determined at the time of the investment, guaranteed returns at the rates.
Capital protection: Full or partial, as the case may be, capital protection in debt funds. Protects your capital against market risks.
Low risk: These plans carry relatively lower risks with funds invested predominantly in high-grade debt instruments.
Tax efficient: While interest income is subject to tax at slab rates, capital gains tax at 20% with indexation benefit if held for over 3 years on Debt Funds is attractively tax efficient to minimise your tax liability.
Diversification of the portfolio: One-time plans act as a fixed-income avenue to help balance your investment portfolio across equity, debt, and gold.
Transparency: It provides a specified underlying portfolio and the nature of payouts to ensure transparency.
Flexible tenures: Select the investment horizon period from 1 to 5 years per financial needs and goals.
Affordable Investment: With a low minimum investment amount in many plans, it is quite reasonable for small investors.

Things to Be Kept in Mind Before Investing

While such single-time investment plans have a lot of advantages, the following are a few pointers which should be kept in mind before investing:

Lock-in Period: Your money remains locked in for the entire tenure of the plan. Liquidity is very low.
Early withdrawal penalties: Scheme may have heavy penalties for early withdrawal or might entail high charges.
Interest rate risk: The returns from debt funds might fall with a decrease in interest rates.
Credit risk: Though the risk of default in the case of debt investments is always there, it is nicely mitigated as the money is invested in high-rated instruments only.
Taxation: Interest income is fully taxed. Even the capital gains after 3 years attract taxes.
Non-flexible: You can't increase/decrease the investments later or move funds during the tenure.
Limitation on the number of funds: Most investors can enjoy the investment for one plan per fund house per year for tax benefits.
Return comparison: Study the post-tax returns and compare them with alternative fixed-income options before putting your money.

So, weigh your financial goals, time horizon, risk tolerance and liquidity needs before investing in one-time investment plans.

Conclusion

One-time investment plans provide a fixed-income avenue for lump sum investments through a hands-free, simple, low-risk approach. Such instruments are meant for passive investors who may not be inclined to monitor their investments daily but would be okay with assured returns. However, do due diligence on the reputation of the fund house, portfolio, track record, returns, taxation, and liquidity for being invested. Evaluate if post-tax returns justify investing your corpus in a locked-in product for a long tenure.