This post was most recently updated on October 1st, 2023
A lot of people reach out to me and ask, I want to invest safely; is there any other alternative than bank FD? Well, there are many safe investment options other than FDs. In this article, let’s look at 13 safe investments with high returns in India, including PPF, SCSS, PMVVY, Post Office Schemes, Debt Mutual Funds, Kisan Vikas Patra, and Sukanya Samiddhi Yojana.
There is an astonishing amount of money saved as fixed deposits in Indian banks, earning meager returns for investors. People often miss realizing that there are other good avenues to invest their money with less risk on the capital invested but with decent returns that are higher than fixed deposits most of the time.
Consider reading: Top 10 best investment options in India
13 Safe Investments with High Returns in India 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)||8.15%||Best interest rate||Only available for |
|RBI Floating Rate Savings |
|7.42%||Good interest rate||Lock in for 7 years||No||No risk|
|Senior Citizens Savings |
|8.0%||Good interest rate||Only available for |
|Pradhan Mantri Vaya |
|7.40%||Good interest rate, |
|Only available for |
|Post office schemes||6.6%-7.0%||Good interest rate||Lock in period||No||No risk|
|Corporate Fixed Deposits |
|6-9%||Best interest rate||Very risky||No||High risk|
|Tax-free bonds||5-6%||Interest earned is |
|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
As you can see from above, there are numerous safe investment options available that give excellent returns for conservative investors.
Looking for investments for the short term? Consider reading: Best Short Term Investment Plans in India
Things to note: Although investment options provide better interest rates than FD, you should be aware of the lock-in period when you invest in these 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 using your Investment Goal Online Calculator to check how much returns you will expect on your investments for these Safe Investment Options
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 Yojana 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 that suits your needs. Don’t get carried away with lucrative offers that may not work in your favor.
Consider reading: Sukanya Samriddhi Yojana Returns Calculator
Why you Should Go for Safe Investments with High Returns in India?
Investing in safe investments with high returns in India can offer a range of benefits for investors.
Here are some reasons why you should consider investing in these types of investments:
- Preserve your capital: Safe investments, such as fixed deposits and government-backed schemes, are designed to preserve your capital and protect your money from market volatility. This means that your investment is less likely to lose value over time.
- Achieve your financial goals: Investing in safe investments with high returns can help you achieve your financial goals, such as saving for a down payment on a house, funding your child’s education, or planning for retirement. These investments offer a predictable rate of return, which can help you plan and budget more effectively.
- Diversify your portfolio: Investing in safe investments can help you diversify your portfolio and spread your risk across different asset classes. This can help you reduce your overall risk and protect your investments against market downturns.
- Tax benefits: Many safe investments, such as the Public Provident Fund (PPF) and National Savings Certificate (NSC), offer tax benefits that can help you save money on taxes. These investments are considered tax-saving investments and can help you lower your taxable income.
- Easy accessibility: Safe investments are often easy to access and require minimal paperwork. For example, you can invest in PPF, NSC, and other government-backed schemes through your local post office or bank.
Investing in safe investments with high returns in India can provide a secure and effective way to grow your wealth over time.
By preserving your capital, achieving your financial goals, diversifying your portfolio, and taking advantage of tax benefits, you can make the most of your investments and achieve financial success.
Looking to Invest or Park Lump Sum money? consider using our Lumpsum Investment Calculator to check returns on your lump sum investments.
Advantages and Disadvantages of Safe Investments with High Returns in India
Investing in safe investments with high returns in India can offer a range of benefits, but it’s important to consider both the advantages and disadvantages before making any investment decisions.
Here are some of the key advantages and disadvantages of the safe investment options in India to keep in mind:
Advantages of Safe Investments with High Returns in India:
- Lower risk: Safe investments, such as fixed deposits and government-backed schemes, are considered low-risk investments. They offer a predictable rate of return and are less likely to lose value over time.
- Steady income: Safe investments offer a steady source of income, which can be beneficial for retirees or those who are looking for a stable source of income.
- Tax benefits: Many safe investments offer tax benefits, such as deductions on income tax, which can help investors save money on taxes.
- Diversification: Investing in safe investments can help investors diversify their portfolios and spread their risk across different asset classes.
Disadvantages of Safe Investments with High Returns in India:
- Lower returns: Safe investments typically offer lower returns compared to riskier investments, such as stocks or mutual funds. This means that investors may need to invest more money or for a longer period of time to achieve their financial goals.
- Inflation risk: Safe investments may not keep pace with inflation, which can erode the value of the investment over time.
- Limited liquidity: Safe investments, such as fixed deposits or government-backed schemes, may have limited liquidity, which means that investors may not be able to access their money when they need it.
- Lock-in period: Some safe investments, such as the Public Provident Fund (PPF), have a lock-in period, which means that investors cannot withdraw their money before a certain time period.
In conclusion, investing in safe investments with high returns in India can offer a range of advantages, such as lower risk, steady income, tax benefits, and diversification.
However, it’s important to consider the potential disadvantages, such as lower returns, inflation risk, limited liquidity, and lock-in periods, before making any investment decisions.
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FAQ on Safe Investments with High Returns 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 that 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 the immediate future thus providing security on investment.
Is investing in stocks safe?
Stock investments are considered as risky as the returns on investments depend on market conditions. There is no guarantee that you will have any returns from your stock Investments.