Investing is an important aspect of wealth creation that helps beat inflation, fulfil goals, and stabilize your financial future. In India, many companies offer safe investment instruments that offer high returns. Options for safe investments with high returns in India for Canadian NRIs also include fixed deposits and recurring deposits. To a large extent, these options are as safe as the typical government-backed policies.Read more
Save upto ₹46,800 in tax under Sec 80C
Inbuilt Life Cover
Tax Free Returns Unlike FD+
Such investment vehicles are perfect for conservative investors who do not have much risk appetite and desire to enjoy commendable returns.
Selecting a safe investment vehicle enables people to enjoy a proper financial cushion in the long term while also optimally securing their funds and gaining good returns.
Moreover, many options for safe investments with high returns in India allow Canadian NRI investors to save money on taxes. Here are some of them:
It is a type of Unit Linked Insurance Plan or ULIP plan that broadly focuses on protecting the principal of the investor against losses.
Capital guarantee plans are a combination of insurance and investment, in which around 50-60% of investment tends to be made in capital protection and debt. The rest of the amount is invested in equity.
It is usually offered for a decade's policy tenure, while its premium paying term typically ranges up to a maximum of five years.
On maturity of a Capital Guaranteed plan, the whole premium sum is paid back to the investor with additional benefits offered by the policy.
The market performance of the Capital Guarantee Plan considerably influences its maturity value and returns.
Having a lock-in period of fifteen years, Public Provident Fund is an investment scheme backed by the government.
PPF is a long-term investment scheme designed to help people create a substantial retirement corpus while also saving on their annual taxes. This scheme provides a high interest rate. Moreover, the interest amount earned on the contributed sum and returns are tax exempted as per the Income Tax Act of India.
PPF only requires a minimum investment of INR 500. The maximum investment amount can go up to INR1.5 lakh.
Compared to the regular savings account, fixed deposits or FD tend to provide a greater interest rate. U/C 80C of the Income Tax Act 1961, investments made for five years in a bank fixed deposit are exempted by the tax.
All bank fixed deposits come with a lock-in period. If a person desires to withdraw from their FD before the lock-in period gets over, then they would be charged a certain amount by the bank as interest accrued on the investment.
Some of the prime features of bank FDs are:
The features of bank fixed deposits make it a perfect choice for all investors who want to enjoy guaranteed returns on their investment without losing any risk.
This is a retirement scheme backed by the government and designed to help people secure their financial future. The National Pension Scheme is managed by PFRDA or the Pension Fund Regulatory and Development Authority of India.
Under this scheme, the sum contributed by a person is invested in distinguished market-linked securities like debt and equity to acquire profitable returns.
As of now, the interest rate applicable to the contribution made towards the NPS is around 8-10%. One can make a minimum contribution of INR 6000 in a financial year. This contribution can be made as a lump sum or monthly instalments of a minimum of INR 500.
Any citizen of India can open an account under the NPS scheme, provided their age is between 18-60 years. The NRIs can also participate in the scheme. NPS scheme matures at 60 years of policyholder’s age and can be extended till 70 years.
ULIP is insurance cum investment policy, which allows people to multiply their wealth in the long term while also enjoying substantial financial security.
Under the ULIP, a portion of the premium sum is invested in market-linked securities like equity and debt to offer good returns on investment. The other part of the premium is used by the insurer to provide life coverage to the family of the life assured and ensure their financial security in the situation of any mishap.
By investing their funds in ULIP, one can even enjoy tax exemption under Section 80C of the Income Tax Act.
Mutual funds are a common pool of fins, where several investors invest in market instruments like bonds and equities.
Investors can opt to buy mutual fund units under any scheme and subsequently cash those units based on the NAV or Net Asset Value of the funds. Apart from ELSS and close-ended schemes, mutual funds do not have any minimum investment period.
For investors searching for an investment vehicle that is safe but also has a short locking period, post office schemes can be a good solution.
It is a monthly income scheme offered by the Indian postal service and offers high returns without any type of risk. Through Post Office Schemes, people can enjoy returns in the form of fixed monthly income.
In India, many investment options make it possible to save on tax. The safest ones among them are:
In comparison to a bank fixed deposit, investing in a Capital Guarantee Solution would be a much smarter option.
The latter guarantees full return as on maturity of the policy, apart from the benefit of market returns. By investing in it, one would get back the entire sum of money paid back as a premium, in addition to the benefits offered by the plan.
The above-mentioned safe investments options can help NRIs in Canada to build a significant financial portfolio and save up for their retirement years.
To select the ideal investment option, it is important for investors to have a good understanding of the risks, affordability, investment tenure, financial goals and liquidity requirements. Opting to invest in such funds can help people to develop a robust financial cushion for the long term.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
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