Safe Investments with High Returns-Best Safe Investment Options in India| MotilalOswalThere are 2 kinds of traders – one with a mighty risk appetite and the other with a conservative approach. So if you’re the latter, we have many safe investment options that will reap benefits in the future.
If you want to build a decent pool of your own savings then what are your best investment options? If you want to retire securely then what are the good investment options? If you want to settle with a steady income then what are the money investment plans?
We’ve profiled a few financial instruments that are safe investment options and yield good returns. These can be invested in through a post office as well as a nationalized bank and are hence available in pretty much every corner of our country.
Public Provident Fund (PPF)
By investing in PPF, you can get assured returns along with several tax benefits. The rate is fixed by the Government every year on a case-to-case basis but it is somewhere in the region of 8 to 9% per annum. It is compounded annually and is payable on the minimum amount in your account between the 5th and last day of every month. The time frame for PPF is 15 years and can be extended by blocks of 5 years after it. Part borrowing is allowed from PPF from the 3rd to 6th year and part withdrawal is allowed once every year after the seventh year. The interest earnings on PPF are tax-free and this safe investment option is also eligible for deduction under section 80C. You can use a PPF calculator to estimate how much your PPF investment will grow over time given a specified rate of return and investment amount.
National Savings Certificate (NSC)
This safe investment option functions like a fixed deposit in a bank. The rate is fixed by the Government every year on a case-to-case basis but it is somewhere in the region of 8 to 9% per annum. It is compounded half-yearly. It is available for a time frame of 5 years and 10 years. The 5-year plan is highly recommended. The NSC is transferable to another person and loans can be taken against a NSC. Any encashment before due date is not possible.
This safe investment option is eligible for deduction under section 80C. Interest accrued is also eligible for section 80C benefit, except in the last year. There is no maximum investment limit on this but section 80C benefit is limited to Rs 1 lac a year.
Senior Citizens Savings Scheme (SCSS)
This safe investment option scheme is for senior citizens to earn safe and assured regular income. The rate is fixed by the Government every year on a case-to-case basis but it is somewhere in the region of 8 to 9% per annum. It is payable on a quarterly basis. The time frame for this investment is 5 years and can be extended by another 3 years after it. Partial withdrawal, transfer or loan is not possible under this scheme. Premature encashment of this scheme within one year is not allowed. The same done between 1 and 2 years will lead to 1.5% penalty and if done after 2 years, before maturity, will lead to 1% penalty.
Financial services at Post Offices as safe investment options
Post office savings account
Deposit your monthly savings in your account at the post office. These accounts earn 4% interest annually and can be withdrawn at any time.
Post office recurring deposit
Invest small savings every month to earn a higher return through the recurring deposit at post offices. The time frame for investment in them is 5 years but you can withdraw from these deposits after a year has passed, in the form of a loan. RD Calculator is a tool that can helps you calculate the maturity amount and interest on your recurring deposit.
Post office time deposit
Post office time deposits offer various time periods of fixed deposits to earn reasonable rates of interest. They start from 1 to 2 years, 3 years and go up to 5 years. The interest rates are fixed every year on a case-to-case basis.
Post office monthly income scheme
This scheme has been started for the retired and risk averse people to have a steady source of income. The interest is payable monthly over a 5-year time frame and the interest rate for this is fixed every year on a case-to-case basis.
Fixed deposits (FDs) are a low risk investment that can help grow money over time. And certain FDs also offer tax benefits.
FDs are simple and safe investment options but there are few points you need to consider before investing. Check the credit profile that helps establish whether the company will honour all capital and interest payments. Check if the rate of interest is high on your FD compared to other FDs. FDs relay out interests in monthly, quarterly, annually or a one-time payment on maturity. Opt for the option that meets your needs. But compounding makes the one-time payment option more lucrative.