Top 6 Safe Investments with High Returns in India
The Top 6 Safe Investments with High Returns in India. There are a lot of investment avenues in India which offers high returns. With a plethora of options to choose from, it is quite obvious that one would not be sure of where to invest. To term a particular investment avenue as the ‘best’, we must need to analyze one’s requirement and risk appetite. There are investment options that suit an individual’s goals and requirements.
Indians (peoples of India) generally prefer to invest in government-backed instruments because these are considered safe investment avenues. Following are few of the most popular investment avenues in India:
Bank Fixed Deposit (FD) – Top 6 Safe Investments with High Returns
In India, Bank Fixed Deposits (FDs) are considered as one of the safest investment options because there are hardly any instances of a bank defaulting on FD(Fixed Deposit). Bank FDs offer a much higher rate of interest than a regular savings bank account. Investments in 5-year tax-saving fixed deposits (FDs) are covered under Section 80C of the Income Tax Act, 1961, and investors can deduct up to Rs 1,50,000 a year by investing in this. Fixed deposit’s (FDs) offer a little bit higher rate of interest for senior citizens. The rate of interest varies across the investment tenure, amount, residential status (NRI or not), and bank. FDs come with a lock-in period. If you wish to withdraw within the lock-in period, then the bank would levy penalties in the form of deducting interest accrued on the investment. Apart from banks, other financial institutes also offer FDs.
Important features (benefits) of bank deposits:
- You get assured returns over time
- Best suited for risk-averse investors
- Partial withdrawals and loan against balance is available
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Public Provident Fund (PPF) – Top 6 Safe Investments with High Returns
Public Provident Fund is a government-backed investment scheme. PPF investment has a lock-in period of 15 years. Public Provident Fund is considered as one of the safest investments as sovereign guarantees back the scheme. Like bank FDs, PPFs offer a much higher rate of interest than a regular savings bank account.
Important features (benefits) of Public Provident Fund (PPF):
- Best suited for long-term financial goals as the scheme comes with an extended lock-in period of 15 years.
- The investment is not linked with markets and hence offers assured returns over time.
- Upon maturity, you have an option of redeeming the entire corpus or extend the account over a block of five years.
National Pension Scheme (NPS) – Top 6 Safe Investments with High Returns
National Pension Scheme (NPS) is another government-backed retirement scheme. This scheme is managed by the Pension Fund Regulatory and Development Authority (PFRDA). National Pension Scheme (NPS) is a combination of various investments such as liquid funds, fixed deposits, and corporate bonds. There are various schemes under NPS, you can choose as per your requirement. The rate of interest various across the funds.
Important features (benefits) of National Pension Scheme (NPS) :
- The scheme is open for subscription to employees working in all sectors
- The scheme provides tax deductions of up to Rs 2 lakh a year under the Income Tax Act, 1961, provisions
- You can choose either auto or active way of managing your portfolio
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Gold – Top 6 Safe Investments with High Returns
Investing in gold is a traditional investment. Indians are very much fond of the yellow metal. Gold investments are made in the form of purchasing gold jewellery, coins, and bars. Apart from possessing physical gold, investments in gold can be made by investing in gold ETFs and sovereign gold bonds.
Important features (benefits) of gold:
- Investing in gold provides a means to hedge against inflation
- As the gold price is inversely related to stock markets, investing in gold acts as a hedge against stock market fall
- The price level of gold does not fall significantly over time, giving you the benefit of capital protection
7.75% GoI Savings Bond – Top 6 Safe Investments with High Returns
The G-Sec bonds replaced the erstwhile 8% savings bond. These bonds were launched in 2018. As the name suggests, investors get annual interest at the rate of 7.75%. You can invest a sum as low as Rs 1,000 in these bonds.
Important features (benefits) of 7.75% GOI Savings Bonds:
- Your investments are backed by sovereign guarantees, giving you capital protection
- You get an assured rate of return at 7.75% a year
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Recurring Deposit (RD) – Top 6 Safe Investments with High Returns
The Recurring deposit (RD) is an alternative to Fixed Deposists (FDs). Under Recurring deposits (RDs), individuals invest a fixed sum regularly. Like FDs, RDs too offer a much higher rate of interest than a regular savings bank account. You can furnish your RD investment as a collateral to avail secured loans. Apart from the investment avenues covered in this article, the other popular investment options in India are the National Savings Certificate (NSC), stock markets, and real estate.
Important features (benefits) of Recurring Deposit (RD) :
- Investing in an Recurring Deposit (RD) for a longer tenure helps you instill a sense of financial discipline over time
- You don’t need a large sum to get started with your investment journey as you can start with a small sum
- You get assured returns over time as the investment is not linked to the equity markets
Comparison of top safe investments
|Investment||Return Potential||Risks||Suitable for|
|Bank Deposits||Medium||Nil||Risk-averse investors|
|GoI Savings Bonds||High||Nil||All|