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