There are several investment avenues available in the market. According to financial experts, investors must park their wealth in schemes that offer higher returns. Investors should look for a portfolio with lower risk rather than going for the higher risk portfolio, they say. For risk-averse investors, fixed income instruments – which guarantee a specific rate of return – are ideal. For example- investment in fixed deposits (FDs), public provident fund (PPF), recurring deposits (RDs) make safe returns, experts say.
Here are 5 investment options that offer safe returns
1. Fixed deposits (FDs): Fixed deposits (FDs) are secure investment instruments that offer higher interest rates than deposits in savings accounts. These accounts can be started for a specific period, which can be as short as seven days. The interest rates on FDs are decided on the basis of the tenor of the instrument. Commercial and small finance banks, post office and non-banking financial companies (NBFCs) offer the option of opening and FD.
2. Recurring Deposit (RD): RD is a kind of investment plan that allows investors to save a fixed sum every month and earn an interest income on the same. All major financial institutions across the country offer the facility of opening an RD account. An investor can choose from a variety of terms – or maturity period to set up an RD account.
3. Public Provident Fund (PPF): Public Provident Fund or PPF account, offered by various institutions, is a retirement planning-focused instrument. PPF comes under the exempt, exempt, exempt (EEE) status. Interest rate is determined by central government on quarterly basis. At present it is 8.0 per cent per annum. Interest is calculated on the minimum balance between fifth day and end of the month and is paid on March 31 every year.
4. Monthly Income Scheme (MIS): For the current quarter, MIS account provides an interest rate of 7.7 per cent. It has a maturity period of five years. The maximum amount that can be invested is Rs. 4.5 lakh in case of a single account and Rs. 9 lakh in case of a joint account. However, the income is subject to taxation.
5. National Pension System (NPS): NPS is a government-sponsored retirement planning instrument regulated by the Pension Fund Regulatory and Development Authority (PFRDA). It allows individuals to contribute towards building a pension corpus throughout their working life. There are two types of accounts that are opened under NPS: Tier I and Tier II. Tier I is a pension account and is mandatory. Tier II is a savings account and is optional.