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IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

 

Safe Low-Risk Investment With apt Returns In India

While investing money, everyone looks for safe investments with low risk and high returns, especially when times are uncertain. But there are several investment options available today that might confuse you. Starting with any investment, you must assess your financial goals, risk appetite, liquidity requirements and time horizon.
 

Usually, people in the midlife stage are conservative in their investment strategy. One of the most popular investments considered safe by many Indians is fixed deposits. But there are many investment avenues along with FDs that are low risk and safe. Let’s find out about the safest low-risk investment options in India.
 

Safe Low-Risk Investment Options in India
 

Here are the safe, low-risk investments in India:


  • Public Provident Fund (PPF)


    Launched by the Ministry of Finance in 1968, Public Provident Fund is a small savings scheme with a 15-year tenure. You can open a PPF account at any age if you are an Indian citizen. The investment scheme is one of the safest and low-risk options, which is best suited for wealth creation and retirement planning.

    The features of the scheme are:
     

    • You can invest a minimum of ₹500 per annum in a PPF. The maximum sum you can invest in a year is ₹1.5 Lakh.
    • The current rate of interest under the scheme is 7.1%. The interest rate is fixed by the Ministry of Finance quarterly.
    • After the completion of the 15-year tenure, you can extend the scheme in a block of five years with no need to invest money.
    • You can also avail of a loan from your PPF account according to the terms and conditions.
    • The scheme allows for partial withdrawal of funds after a five-year lock-in period.
    • You cannot close the account before the completion of five years.
    • One can open a PPF account with ₹100 only.

  • Bank fixed deposits
     

    Fixed deposits are one of the safest and low-risk investments in India. FD is a type of bank account that offers a fixed interest rate. The investor is not allowed to withdraw the funds for a specific period.
     

    Features of fixed deposits include:
     

    • The fixed deposit tenure ranges from 7 days to 10 years.
    • You can also avail of loans against fixed deposits.
    • The plan offers interest at the rate of 4-6 per cent per annum.
    • The fixed deposit returns are compounded monthly/quarterly/annually depending on the financial institution.

  • Unit-linked insurance plan (ULIP)
     

    A unit-linked insurance plan is one of the lucrative low-risk investments in India. It offers investment plus insurance with single premiums. Along with wealth creation, the plan provides financial protection to your loved ones.
     

    The features and benefits of ULIPs include:
     

    • You can pay the premiums in a lump sum or monthly/quarterly/ semi-annual/annual periodic payments.
    • The fund managers appointed by the insurance company pool the funds of all policyholders and invest them in the financial market.
    • The investment corpus is divided into units with a face value known as the Net Asset Value.
    • You can make partial withdrawals after a lock-in period of five years.
    • ULIPs offer tax*-free switching between equity and debt funds according to risk appetite.
    • The top-up facility allows you to increase the premium under a ULIP.
    • The premiums and returns under a ULIP are tax*-exempt under Section 80C and Section 10(10D) of the Income Tax* Act, 1961.

  • National Pension Scheme (NPS)



    The National Pension Scheme is a scheme aimed at retirement planning. Launched in 2004 for government employees, the scheme is now open to the resident or non-resident Indian citizens. Its features include:
     

    • The age criteria of the scheme are 18-65 years.
    • The minimum amount per contribution is ₹500.
    • You can make a minimum investment of ₹1000 in a financial year.
    • The scheme is market linked and does not offer fixed returns. But the returns vary from 8-14%.
    • At least 40% of the retirement corpus is kept for pension payment, while you can withdraw the remaining 60% in a lump sum. The lump sum amount is tax*-exempt.
    • You can also make partial withdrawals up to 25% under certain conditions.

  • National Savings Certificate (NSC)
     

    National Savings Certificate is a tax-saving investment option with more returns and low risk. You can purchase the scheme from any post office in India if you are an Indian resident. NSC offers fixed returns on investment and is best suited to risk-averse individuals. The features of the National Savings Certificate are as follows:
     

    • You can invest a minimum sum of INR 1000 with no maximum limit.
    • The NSC interest rate is 6.8 per cent.
    • The scheme has a lock-in period of five years.
    • You cannot make premature withdrawals. 
    • The scheme offers tax* benefits under Section 80C of the Income Tax* Act.
    • Many financial institutions allow you to avail of loans against NSCs.

  • Equity-linked savings scheme (ELSS)
     

    Equity-linked savings scheme is a type of mutual fund that primarily invests in equity or stocks. The ELSS investments are made in large, mid and small caps and industry sectors and help in long-term capital appreciation. The features of ELSS are:
     

    • The investment has a lock-in period of three years.
    • Investments up to ₹1.5 Lakh under ELSS mutual fund are eligible for tax* deduction under Section 80C of the Income Tax* Act, 1961.
    • The long-term capital gains under ELSS are tax*-exempt, up to ₹1 Lakh. Capital gains above ₹1 Lakh are taxed at 10%.

Conclusion
 

Now you know about some of the risk-free investments available in India. Before choosing an investment avenue, you must analyse your financial goals and needs. Also, consider the lock-in period and tax* benefits while opting for a suitable option.
 

Life insurance investment is one of the apt investments you can make for the long-term protection of your family.
 

With a range of plans, TATA AIA, provides you with suitable ways to protect your loved ones in case of an eventuality. So, buy a suitable insurance cover for yourself and ensure your family doesn’t give up on their dreams in your absence. 

L&C/Advt/2023/Jan/0232

Get complete protection at affordable cost & tax benefits

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

 
Frequently Asked Questions


Here are some FAQs about safe investments in India:

What are small investments with big return options in India?

Employee Provident Fund, Public Provident Fund, Senior Citizens Savings Scheme, Sukanya Samriddhi Yojana, Post office schemes, etc., are some of the small investments with big returns in India. 

What is the present interest rate on PPF?

The PPF’s current interest rate is 7.1% per annum.

Disclaimer

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not guaranteed issuance plans, and they will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and does not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICY HOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.
  • Past performance is not indicative of future performance.
  • All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.
  • Please make your own independent decision after consulting your financial or other professional advisor.