This post was most recently updated on January 3rd, 2023
Most Indian middle-class families and retired individuals are conservative in their investment approach. People prefer to have a moderate return but do not wish to take a lot of risks to get the returns. In this article let’s look at 13 safe investments with high returns in India.
There is an astonishing amount of money saved as fixed deposits in Indian banks earning meager returns for the investors. People often miss realizing that there are other good avenues to invest your money with not much risk on the capital invested but have decent returns which are higher than fixed deposits most of the time.
13 safe investments with high returns in India 2023
Here is the list of 13 safe investments with high returns in India in 2023:
| Investment Type | Expected returns | Merits | Demerits | Tax exemption | Risk |
| Bank Fixed Deposit | 6-7.5% | Easy to Invest | Low-interest rates | No | Low risk |
| Public provident fund / PPF | 7.10% | Good interest rate | 15 years lock-in | Yes | No risk |
| Employee provident fund / EPF | 8.50% | Best interest rate | Only available for salaried employees | Yes | No risk |
| RBI Floating Rate Savings Bonds | 7.42% | Good interest rate | Lock in for 7 years | No | No risk |
| Senior Citizens Savings Scheme | 8.0% | Good interest rate | Only available for senior citizen | Yes | No risk |
| Pradhan Mantri Vaya Vandana Yojana | 7.40% | Good interest rate, payable monthly | Only available for senior citizen | No | Low risk |
| Post office schemes | 6.6%-7.0% | Good interest rate | Lock in period | No | No risk |
| Corporate Fixed Deposits and NCDs | 6-9% | Best interest rate | Very risky | No | High risk |
| Tax-free bonds | 5-6% | Interest earned is tax-free | Low-interest rates | No | No risk |
| Debt Mutual Funds | 6-9% | Best interest rate | Risky in some cases | No | Medium risk |
| Kisan Vikas Patra | 7.2% | Good interest rate | Lock in for 124 months | No | No risk |
| National savings certificate | 7.0% | Good interest rate | Lock in for 5 years | Yes | No risk |
| Sukanya Samriddhi Yojana | 7.6% | Best interest rate | Lock in period only available for girl child | Yes | No risk |
Consider reading – Top 10 best investment options in India
As you can see from above there are numerous safe investment options available that give excellent returns for conservative investors.
Things to note – Although the investment options provide better interest rates than FD, you should be aware of the lock-in period when you invest in these investment options. There is no point in locking your money for a longer duration only to get marginally better returns.
If you haven’t considered debt mutual funds then you should have a look at investing in debt mutual funds to diversify your investments. Debt mutual funds offer excellent returns if you understand the risks properly. There are various types of debt mutual funds available in the market. Consider reading – Are debt funds safe? which debt funds to invest?
Things to consider before selecting a safe investment plan
As you have seen in the above table, there are a number of choices you have to select from different investment options but when it comes to selecting the best plan here are some tips for you:
- Choose a plan where the lock-in period is less.
- A higher interest rate doesn’t always mean the best investment.
- Check how easy it is to manage your investments (plans like Sukanya Samriddhi Yojna are very difficult to manage)
- Look for additional tax benefits if possible.
- Check the penalty in case you need to do a premature withdrawal.
Always make sure you select an investment plan which suits your need. Don’t get carried away with lucrative offers which may not work in your favor.
FAQ on safe investments with high returns in India
Here are some FAQs on safe investments in India
What is the safest investment with the highest return?
Considering all the options available, PPF / EPF / VPF is an excellent choice for a safe investment with high returns in India.
Which investment options give high returns with tax benefits?
PPF, EPF, VPF, Senior Citizens Savings Scheme, National savings certificate, and Sukanya Samriddhi Yojna give excellent returns with 80C tax benefits.
Are debt mutual funds safe to invest in?
There is an increase in fear after Franklin Templeton AMC had issues with their debt mutual funds in 2020. Retail investors started fearing losing money in debt mutual funds.
In actual fact, there are many types of debt mutual funds available in the market, and not every debt mutual fund is the same. You should be evaluating debt mutual fund and risks to see if it suits your investment needs.Are liquid funds better than FD?
In most cases, liquid funds are better than FD as they offer slightly better returns than FD and they are very easy to purchase and sell. You don't need to lock your money for a duration to get returns on your liquid fund returns as compared to FD
Is debt mutual fund risk-free?
No. Debt mutual funds are not risk-free. There are some types of debt mutual funds which invest in risky debt instruments and they carry a risk of losing the invested capital.
Which is the safest debt fund?
Liquid funds and overnight funds are considered as safest debt mutual funds as they invest in instruments that mature in immediate future thus providing security on investment.
Is investing in stocks safe?
Stock investments are considered as risky as the returns on investments depending on market conditions. There is no guarantee that you will have any returns from your stock Investments.
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[…] was subsequently reduced to 7.4% in 2020 because of the fall in interest rates and for most of the savings scheme across all different savings […]