Investment plans: Top Low-risk Investment Options in India


While full-time investors understand the nuances of the market, others are liable to misinterpret the market functionality, causing significant losses. In 2018, Indian stock investors lost Rs.2.72 lakh crore within 48 hours.

Thus, you must consider the best investment options in India before choosing a suitable instrument. Listed below are some of the safest options available to investors in the country today.

Low-risk investment options

Investors particularly averse to risk can consider the following options for wealth generation. Nevertheless, the returns from these investments are comparatively limited when compared to the more high-risk products available in the market.

  1. Fixed deposits

Several financial institutions offer fixed deposit investment options to customers. These instruments are considered safe since financial institutions rarely default on interest payments earned from FDs.

The security of fixed deposit investments is such that they have become an alternative to savings accounts. This is mainly because such investments generate better returns compared to the interest earnings from the latter.

Moreover, 5-year tax-saving FD plans allow you to claim tax exemptions under Section 80C of the Income Tax Act, 1961.

Listed below are other benefits of fixed deposit investments –

  • Reputed financial institutions offer immense flexibility when it comes to the maturity tenor for such plans. You can choose the shorter-termed investments to fund your immediate financial objectives and vice versa.
  • FDs have become one of the best investment options in India due to the ready availability of liquidity to investors. With premature withdrawal facilities, you can remove invested funds before maturity to handle emergencies.
  • Further, you can avail a loan against your FD. Ensure you learn how a loan against FD works before opting for such credit, to reduce hassle.
  • If you are 60 years or older, investing in FDs can be particularly beneficial to you. This is because most financial institutions provide additional interest to senior citizen investors.
  • A fixed deposit interest calculator is available online, allowing interested investors the ability to compare the various FD plans in the market before investing.
  • National Pension Scheme or NPS
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A unique investment plan to benefit retired individuals, the Pension Fund Regulatory and Development Authority manages NPS. If you invest in such instruments, your money is deposited across three sectors viz. liquid funds, corporate bonds and FDs. You can expect returns ranging from 8% to 10% per annum.

NPS investments are divided into Tier-I and Tier-II. You need to invest Rs.6000 every year for the former plan and Rs.2000 for the latter option.

  • Public Provident Fund

Considered one of the safest and best investment options in India, Public Provident Fund is a government-backed investment plan. The mandatory lock-in period for such an investment is 15 years. Since PPFs provide a significantly higher rate of interest than a savings account, investors often use them to save for retirement.

  • Equity-Linked Savings Scheme

Equity-Linked Savings Scheme is another relatively safe option for better interest earnings. As the name suggests, if you invest in ELSS, your money will be deposited into equity mutual funds. This is considered one of the best options for individuals looking to save income tax payments.  The lock-in period for your funds is 3 years, although you can opt for longer tenor as well.

  • Recurring deposit

Recurring deposits are similar investment instruments if you compare them to fixed deposits. The only significant difference between the two is the method of depositing funds. Instead of making a lump sum deposit once, RDs allow you to make regular deposits every month. For instance, rather than investing Rs.36,000 at once in FDs, you can choose to invest Rs.3000 every month in RDs.

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Consider carefully where to invest between FDs and RDs. Both are beneficial to earn interest, but they are suitable for different consumers. If making a lump sum payment is too difficult for you, choose recurring deposit from a reputed financial institution.

If you desire a low-risk investment portfolio, these options are the ideal instruments for you. Those who seek higher interest rates need to venture towards the moderate to high-risk investment avenues.

Author Bio:

Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory


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