6 Safe Investment Options in India 2021

fixed deposit

Investment is a necessity to grow your money for the future. While there are various types of investment options to choose from in India, one should keep in mind their age and their requirements for investment. This includes deciding whether 

  1. To invest long term or short term
  2. To invest in risky or risk-free investments
  3. To check liquidity requirements in case of financial emergencies

You need to take into consideration these factors while selecting your investment avenue.

While choosing an investment plan from the various investment options, it is critical to match the risk profile of the investor, that is, you with the related risk of the product

When it comes to investment, people in India choose the safest options. These investments are mostly government-backed instruments. Given below are the few most popular investment avenues in India:

Public Provident Fund (PPF)

Public Provident Fund (PPF) is a retirement savings scheme offered by the Government of India with the aim of providing a secure post-retirement income. PF fund has a long tenure of 15 years and interest is huge especially in the later years. It does make a safe investment but your money is locked for that period of time.

Main features of PPF:

  • Best suited for long-term financial goals as the scheme comes with an extended lock-in period of 15 years.
  • The investment is not linked with markets and hence offers assured returns over time.
  • Upon maturity, you have an option of redeeming the entire corpus or extend the account over a block of five years. 

National Pension System (NPS)

The National Pension System is a long-term investment product that is focused on retirement. It is managed by the Pension Fund Regulatory and Development Authority (PFRDA). It is a mixed bag of investment options containing equity, fixed deposits, corporate bonds, liquid funds, and government funds among others. The decision of investing of how much to invest in the National Pension Scheme involves analyzing your risk appetite for the same. 

Main features of NPS:

  • Employees working in all the sectors can subscribe to the scheme as it is open for everyone.
  • You can save tax of up to Rs 2 lakh as this scheme provides tax deductions of up to Rs 2 lakh under the Income Tax Act, 1961.
  • You can choose either auto or active way of managing your portfolio

Senior Citizens’ Saving Scheme (SCSS)

SCSS is a 5-year investment option for most retirees and can be availed by anyone above 60 from a post office or bank. The tenure can be further extended by 3 years once the scheme matures. With an upper limit of Rs. 15 lakh, the interest rate on scss scheme is payable quarterly and is fully taxable.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

PMVVY is another scheme for senior citizens aged 60 years and above. It provides them a return of 7.4% per annum. The scheme offers pension income from the options of paying monthly, quarterly, half-yearly or yearly. The pension amount ranges from Rs. 1000 per month to Rs. 9250 per month. The tenure is 10 years with a maximum investment of Rs. 15 lakhs

7.75% GoI Savings Bond

Government savings or G- Sec bonds have replaced 8% savings bonds. These GoI Savings bonds were launched in 2018. The investors get an annual interest at 7.75% interest rate. You can invest a sum as low as Rs 1,000 in these bonds.

Main features of 7.75% GOI Savings Bonds:

  • Your investments are backed by sovereign guarantees, giving you capital protection
  • You get an assured rate of return at 7.75% a year

Fixed Deposit

Last but not least is one of the most important investments. A bank Fixed Deposit is considered a safe investment option with the least amount of risk and highest form of liquidity. A fixed deposit is an investment of your savings to earn a higher rate of return than a regular savings account. Money is invested in a fixed deposit with a lock-in period and interest is given either at the end of the maturity date or as a regular payout. Investing in Fixed Deposit is a very smooth process and can be done at the tip of your fingers.

You need to go through Fixed Deposit schemes of different banks and select the one as per your needs and requirements. Bajaj Finance Fixed Deposit is said to have one of the highest returns with an interest rate of up to 6.75%.