With a plethora of options to the Indian investors, one can easily be confused with the ideal investments for their portfolio. Investors are offered with a range of options according to their risk profile. If you are a risk-averse investor, following are a few top 6 safe investment options in India:
- Bank Fixed Deposit (FD)
FDs are considered as one of the safest investment havens in India as there are hardly any occurrences of a bank defaulting on FD. They provide a much higher rate of interest than a regular savings bank account. Investments in tax-saving FDs are covered u/s 80C of the Income Tax Act, 1961, where the investors can deduct up to Rs1.5 Lakh per annum by investing in this.
- Public Provident Fund (PPF)
PPF is one of the most prevalent savings-cum-investment products which is backed by the government. PPF investments have a lock-in period of 15 years. Similar to bank FDs, PPFs offer a much higher rate of interest than a regular savings bank account.
- National Pension Scheme (NPS)
NPS is another government-sponsored retirement-cum-pension scheme under the purview of the central government and Pension Fund Regulatory and Development Authority (PFRDA). NPS is a combination of various investments such as fixed deposits, liquid funds, and corporate bonds.
Investing in gold is one of the most traditional forms of investment since age immemorial. Indians are deeply fond of the yellow metal. Gold investments are made in the form of buying gold coins, jewellery, and bars. Apart from possessing physical gold, investments in gold can be made by investing in sovereign gold bonds and gold ETFs.
- Equity-Linked Savings Scheme
ELSS is a type of mutual fund that invests predominantly in eqity and equity related securities. These mutual funds also offer tax benefit of up to Rs1.5 Lakh under Section 80C of the Income Tax Act, 1961. Securities and Exchange Board of India (SEBI) has mandated a minimum of 80% exposure to equity mutual funds. Exposure to equity fund helps to generate significantly higher returns in the long term. These funds are accompanied with a lock-in period of 3 years.
- Recurring Deposit (RD)
Under RDs, individuals invest a fixed amount regularly. It is an alternative to a bank fixed deposit. Like FDs, RDs too offer a substantially higher rate of interest than a regular savings account. You can also furnish your RD investment as a collateral to get secured loans.
Other popular investment options in India are the National Savings Certificate (NSC), mutual fund investments, stock markets, and real estate. Whatever mode of investment you decide to move forth with, ensure that it aligns with your financial goals and risk profile. Happy investing!