Indians are not risk takers which explain their preference for opting for safe returns. Majority of the population does not possess financial literacy and consequently are not aware about various financial products available in the market. Investment in equity has not caught up with the general public as most of them regard it as risky even akin to gambling. However, for getting higher returns on your capital there is better option than entering equity. There is no denying the fact that investing in equity needs high level expertise with good understanding of risk management. Notwithstanding, there are many safe investments with high returns in India for those who are risk averse.
Top 5 safe investment options for safe investment in India
Realizing the need of the Indians for perceivably safe investment I have put together a list of top investments delivering high returns some of which are even backed by the sovereign guarantee. Various investment options listed here for the consideration of our readers.
Unit Linked Insurance Plan (ULIP)
Unit linked insurance plant is one of the options available for safe investing with relatively higher returns. It is an innovative financial product offering you the platform for getting decent returns on your investment besides getting protection for your family. The plan invests 70% of the premium you pay in equities, government securities, corporate bonds and various money market instruments in order to grow your capital in the long term. The remaining 30% of the premium paid is used for providing life coverage to the family of the plan holder in case of any eventuality. The plan assures financial stability with comprehensive maturity and death benefits. Moreover, the ULIP also provides with the benefit of tax exemption under Section 80 C of the Income Tax Act.
National Pension Scheme (NPS)
NPS is an excellent financial product for securing financial independence after retirement. It is government backed investment option delivering decent return between 9-12 percent. The scheme is administered under the Pension Fund Regulatory and Development Authority of India. After subscription of the scheme, your money is invested in the equity, debt and other financial instruments for getting excellent returns for the subscriber of the scheme.
Also read: Six Major Cryptocurrencies
Any person can pay a minimum of Rs 500 monthly or RS 6000 annually for availing the subscription. There is no upper limit to your investment. However, your investment must be commensurate with the pension you want to get after retirement. For example, for getting a pension of Rs 50,000 after retirement at 60 years you will be required to invest Rs 12,500/- per month starting from the age of 30 to the age 60. Any citizen between 18-60 years of age is eligible to apply for the scheme. It also allows tax exemption under the relevant sections of the Income Tax Act.
Bank Fixed Deposit
Bank fixed deposit has been and still is the most popular investment option for the majority of the Indians. As opposed to the regular saving accounts, fixed deposit pays higher returns. On the other hand, investing in 5 years of tax saving FDS is also covered under the relevant income tax previsions.
Senior citizens are provided with higher interest rates. However, the interest rates vary across banks and regions and also for amount. The fixed deposits also come with lock-in periods. And, if you withdraw your investment before the lock-in period, the interest accrued would be deducted from your investment. All in all, it is one of the most opted financial products for people with limited risk appetite.
Public Provident Fund (PPF)
It is a lucrative long-term investment option with a lock-in period of 15 years. It is one of the few options guaranteed by sovereign power of the Government of India. There is no other investment vehicle delivering safe and high returns as PPF. It is an ideal investment for creating retirement corpus besides providing you with annual tax exemptions. Moreover, the interest accrued on the contributed amount is tax exempted.
PPF returns are not subject to market fluctuation but deliver fixed returns over a long-term. On maturity, you have the option to redeem the entire sum or you can also extend the account for another five years. It can be started with a minimum sum of Rs 500 or maximum of 1.5 lakh annually. Overall, it is counted among the best investment options in India for safe and high returns.
Also read: Top 5 FMCG Companies in India
Capital Guarantee Plan
Capital Guarantee plans are focused on ensuring guaranteed returns to the investors. This investment option is a lot like ULIP but is distinguished by its focus on protecting the principal of the investors during economic recession. The plan combines the elements of investment and insurance with 50-60 percent of the investment is deployed in debts for capital protection and the rest is invested in the equity.
This policy is offered for period of ten years and the premium paying tenure of the plant is 5 years. On maturity of the fund, the entire premium is paid back to the investor as also the returns earned by the capital employed in the equity. Investing is majorly done in the conservative instruments for guaranteed returns.
Disclaimer: The views and investment tips expressed here are for educational purposes only and should not be considered as a call for investment. Bussinessfab.com advises users to consult a certified investment advisor before taking any investment decision.
