When we talk about fixed deposit, we know that it is one of the safest forms of investment. A safe investment is all about an investment where there is very little or zero risk involved. It is mainly meant for the people who do not like taking risks, therefore is primarily meant for people who have a conservative investment ideology. This is indeed favourable at times as there is no risk involved. Furthermore, there is a myth that if no risk is involved, the returns would not be high.
There are several investment options which provide you good returns with minimum risks. Not only that, but these investment methods help you to avail tax benefits and are plenty in numbers. Based on your needs, you can opt for any of these and hope to get a decent income. All these modes have different features and thus each one of them attracts the investors for their peculiar feature. Here are some of the investment options:
Fixed Deposits: As soon as anyone mentions about risk-free investment, FD is the name that comes first. It just pops into our mind straight away. The reason why they are preferred over any other forms of investment is that they are safe and offer great returns when compared to a savings account. You can expect to get an interest rate of at least 7-8% under fixed deposit. There are several Non-Banking Financial Companies (NBFCs) which are offering interest rates of above 8%.
Recurring Deposits: If you have a fixed monthly income then without doubt recurring deposit is one of the best options for you. They are similar to fixed deposits. Under recurring deposits, you make monthly regular investments which lead to an accumulation of large sum over a period of time. These are taxable too.
Post Office Deposit: POD is available for a period of up to 5 years. And as it goes, longer the tenure, higher the interest rate. Currently, as per the market rates, up to 7.8% interest rate can be availed. The most attractive part about Post Office Deposit investment is that it helps you achieve tax benefits.
Fixed Maturity Plans: FMP is a close-ended scheme which has a fixed term. Fixed Maturity Plans ranges from a period of one month to five years. Your money will be invested in debts and market securities. FMPs come with a fixed maturity rate. However, it is essential to be cautious when investing in FMPs. Make sure that you only opt for AAA-rated Fixed Maturity Plan schemes.
Debt Mutual Funds: Under this, your funds are invested in bonds and government securities. Debt Mutual Funds do not have fixed terms. You do not have to pay any penalty if you wish to take your money back. A long-term plan is advisable with these type of deposits as it will help you with a low rate of interest.
Company Deposits: Company deposits are slightly risky but they are better than the banks in terms of returns. A company FD helps in getting a higher returns on investments. Moreover, make sure you do not risk your investment and opt for only AAA-rated companies.
Public Provident Fund: PPF is one of the most popular investment schemes. They offer an attractive rate of interest which ranges from 8-9%. These schemes provide safety, and amount between INR 500 to INR 1,50,000 can be invested in PPF within a period of one year. Financial security is an end-result of a proper investment. Putting your money in right place is not just essential for growing your wealth but to prepare for tough times as well.