You might be thinking about where to invest money to get good returns given market volatility. However, you can easily consider some of the secured investment options in India to get stable returns on your investment. It helps you reduce risks while diversifying your portfolio of investments. To help you choose your financial instruments, here are a few of the safe investments with high returns that you can opt for.
Top 9 Safe Investments in India
Here are some of the high-return low-risk investments in India:
Fixed Deposits
A fixed deposit is a reliable option for those seeking safe investments with high returns. Fixed deposit interest rates are predetermined by the concerned provider and remain constant for the entire tenure of booking. Further, as a fixed deposit is not linked to the market, this is one of the secured investment options that conservative investors prefer.
Financial institutions offer variable interest rates to depositors based on the investment tenure, principal, residential status and age. Usually, banks provide a higher interest rate to senior and super-senior citizens. The interest rates on fixed deposits are higher than on savings accounts.
In addition, tax-saving fixed deposits, which have a 5-year lock-in period, allow investors to avail tax deductions under Section 80C of up to ₹1.5 lakh. You can avail loans on your FD amount during the lock-in period. Moreover, you can reap the benefits of easy liquidity (partial or full withdrawal) of your fixed deposit (without lock-in) investments. However, banks levy a penalty of 1% on the effective interest rate in case of premature withdrawal.
Public Provident Fund
The Public Provident Fund (PPF) is a Government of India-backed option known for being one of the safest investments with high returns. Investors can invest a minimum of ₹500 to a maximum of ₹1.5 lakh in a PPF account during a financial year.
Moreover, you can avail tax deductions under Section 80C on the invested amount. The returns from a PPF account are completely tax-free as they fall under the exempt-exempt-exempt (EEE) category.
Even though there is a lock-in period of 15 years in a PPF account, you can withdraw your funds partially after the 7th year. Additionally, you can avail loans on your invested amount between the 3rd and the 6th year.
National Pension Scheme
The National Pension Scheme (NPS) regulated by the Pension Fund Regulatory and Development Authority (PFRDA) is a government-backed investment option. This scheme allows all categories of investors to save for their retirement.
Investors can avail tax deductions under Section 80CC for an additional ₹50,000 over and above ₹1.5 lakh on their NPS investment. The interest rate on NPS investment varies across the different funds that the scheme offers.
National Savings Certificate
The National Savings Certificate (NSC) is one of the government-sponsored secured investment options in India. You can invest a minimum of ₹1,000 in NSC with a lock-in period of 5 years. Further, you can multiply your investment in NSC in multiples of ₹100 in 12 instalments.
The Ministry of Finance pays the interest to the investors on maturity. However, you can claim tax deductions of up to ₹1.5 lakh under Section 80C in a financial year to reduce your taxable income.
Post Office Monthly Income Scheme
The post office monthly income scheme is offered by the Indian postal services. You can open a single or joint account in an Indian post office to invest in this scheme. Investors can start investing in this scheme with a minimum amount of ₹1,000. However, the maximum balance in this scheme for a single holding account is ₹4.5 lakh and for a joint holding account is ₹9 lakh.
Senior Citizen Savings Scheme
Senior Citizen Savings Scheme (SCSS), a low-risk investment, allows individuals above 55 years or retired individuals to earn significant returns. You can start your SCSS investment with a minimum of ₹1,000. Nevertheless, you can increase your investment amount up to ₹15 lakh in multiples of ₹1,000. Investors can reap tax-saving benefits and premature closure with their SCSS investment.
RBI Bonds
The Reserve Bank of India allows individual investors and Hindu Undivided Families (HUFs) to invest in RBI bonds with a minimum amount of ₹1,000. The interest is payable twice a year on 1st January and 1st July.
The RBI repays these bonds after 7 years for non-senior citizens. However, the lock-in period of these bonds varies based on the age bracket of investors, in the case of senior citizens. Aged individuals between 60 to 70 years have a lock-in period of 6 years, between 70 to 80 years have a lock-in period of 5 years and 80 years and above have a lock-in period of 4 years.
Government Bonds and Securities
Investors looking for a long-term investment option between 5 years to 40 years can invest their funds in government bonds and securities. As these are offered by the government, low risk is associated with this type of investment.
You can usually earn regular income from government bond interest payout. Moreover, these bonds offer liquidity to investors allowing premature withdrawal during financial emergencies. The Indian Government introduced a 7.75% GOI Savings Bond, that offers the mentioned interest rate which is relatively higher than savings account interest rates.
Sukanya Samriddhi Yojana
Parents of a girl child can open a Sukanya Samriddhi account with a minimum amount of ₹250 and a maximum amount of ₹1.5 lakh during a financial year. You can open the account before your girl child turns 10 years old.
As an investor, you can avail tax deductions under Section 80C of the Income Tax Act with your Sukanya Samriddhi Yojana investment. The interest income from this investment is tax-free under Section 10 of the Act.
The account matures when your girl child turns 21 years old. However, you can claim premature withdrawal of this account for your child’s marriage after she turns 18 years old. You can open only one Sukanya Samriddhi account for your girl child with the banks offering the scheme.
Final Word:
Relying solely on your savings might not be enough. It is time to start building your investment portfolio and adding these options for stability and long-term return. If you are a conservative investor, safe investments with high returns are an excellent choice. These low-risk options not only diversify your portfolio but may also offer tax benefits to help reduce your tax liability.
The minimum investment amount in government bonds varies. Certain government bonds have a minimum investment amount of ₹1,000 while others have a minimum investment amount requirement of ₹10,000.
Parents of a girl child below 10 years can open a Sukanya Samriddhi Yojana account and claim tax deductions of up to ₹1.5 lakh on the invested amount under Section 80C. The interest earned on the invested amount is tax-free under Section 10 as well.
Banks deduct a TDS of 10% if you submit PAN card details and a TDS of 20% if you do not submit PAN card details. However, TDS will be only applicable if the total interest earned in a year exceeds ₹40,000 for a non-senior citizen and ₹50,000 for a senior citizen.
