There are various investment options available that will provide you with beneficial returns if the market conditions are right. However in such options, there is always a high risk of investment. The attractive rates and returns often tempt investors to invest huge amount of their hard earned funds, only to lose it to the volatile market conditions. So what are the favourable low risk investments that are available in India? We give you a few options with a detailed analysis thus helping you decide.
Termed deposits are an ideal option if you want to invest a sufficient amount of your funds for a good return. There are two types of termed deposits that are available, namely fixed deposit and the recurring deposit. The fixed deposit has tenure of a minimum of 5 years with an interest rate of 8.50 to 9.50% depending on the choice of bank. However, a maximum amount of 1.5 lakhs can be invested in each FD. Additionally, you are liable to pay tax if the interest earned on income is higher, putting you in a particular income bracket. When you want to open a FD account, you can choose from the bank FD, tax saver FD or even the regular FD. The recurring deposit has a similar rate of interest with tenure of 6 months to 10 years. One benefit of this deposit is that it is not liable for TDS but the interest is taxable if you are within the investor slab.
Public Provident Fund (Ppf)
If you want to opt for another option rather than to open a FD account or a recurring deposit account, you can opt for the public provident fund. The PPF is one of the safe investment options provided you can wait for a long period for the returns to be invested. The tenure for this investment option is 15 years with an expected return of 8.8%. The amount you can invest is at most 1.5 lakhs. However, depending on your tax bracket you fall under, you will be liable to pay income tax.
Monthly Income Scheme
Like the fixed deposit, the monthly income scheme is a post office scheme that makes for an excellent investment. It is most suited for retired employees or even senior citizens. You can invest anywhere between an amount of 1500 Rs. to 4.5 lakhs in this scheme. Since most of the post offices in India are managed directly by the government, it makes for an excellent investment option. The interest income can be withdrawn by the investor on a monthly basis with the tenure duration of 5 years. The expected return for this investment is 8.4%. However, the interest that is earned is taxable.
While all the options provide a beneficial return, the termed deposits, particularly the fixed deposits provide the ideal returns that will suit all your financial needs. So when you open a FD account today, do look at the offers available before you invest your funds.
Author Bio :- Neha Sharma is a finance student who loves to write in her free time. She is well educated with the different low investment options like the fixed deposit. Through her work she has provided a detailed analysis of the different investment options with the hope that you will be well reassured to open a FD account today.