Safe Investments with High Returns in India

When it comes to financial planning, it becomes very important to look for options that provide financial security along with the benefit of high returns in the long term. Various investment options in India offer profitable returns as well as the benefit of a safe investment.

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What are the Safe Investment Options with High Returns in India?

Exploring safe investment options with high returns in India is crucial for investors seeking to grow their wealth while minimizing risk. Understanding these options can help individuals make informed financial decisions aligned with their goals and risk tolerance. Let’s read further to know more about safe high return investments in India.

  1. Capital Guarantee Plan

    An investment plan offering guaranteed protection of your initial investment alongside market-linked returns. It invests in debt and equity funds, with the insurance company's guarantee, making it the safest way to invest money in India.

    Key Features:

    • Dual Benefit: Combines guaranteed capital protection with potential market-linked returns.

    • Guaranteed Return: At maturity, you will receive your initial investment (premium) back, regardless of market performance.

    • Market Participation: A portion of your premium is invested in equities or debt funds, offering potential for growth.

    • Policy Term: Usually 10 years with a premium payment term of 5 years.

    • Fund Allocation: Usually splits investment 50%-60% into debt and equities, ensuring stability.

  2. Unit Linked Insurance Plans (ULIPs)

    ULIP plans are safe investments with high returns in India. They combine the dual benefits of life insurance coverage with investment in units linked to the market. Offers flexibility to choose between debt and equity funds based on risk appetite.

    Key Features:

    • Investment + Insurance: Combines life insurance coverage with market-linked investments.

    • Investment Flexibility: Choose from various equity, debt, or hybrid funds based on your risk appetite.

    • Potential High Returns: Equity exposure offers the chance for significant growth.

    • Lock-in Period: Usually 5 years, restricts withdrawals during this period.

    • Tax Benefits: Premiums qualify for tax deduction under Section 80C (up to ₹1.5 lakh) and other tax benefits under Section 10(10D).

  3. Public Provident Fund (PPF)

    A government-backed savings scheme is the safest investment in India offering guaranteed returns and tax benefits. Long lock-in period and is ideal for safe, long-term wealth creation.

    Key Features:

    • Government-Backed Scheme: Offers guaranteed returns and high security.

    • Long-Term Investment: Investment tenure of 15 years with extension options.

    • Tax Benefits: Contributions qualify for tax deduction under Section 80C (up to ₹1.5 lakh).

    • Interest Rate: Currently offers 7.1% compound interest annually.

    • Partial Withdrawals: Allowed after 5 years with restrictions.

  4. Life Insurance:

    Life insurance is a financial product designed to provide financial protection to individuals and their families in the event of the insured's death. It offers a safety net for loved ones by providing a lump sum payment or regular income to cover expenses and maintain their standard of living. It is the safest way to invest money, offering peace of mind and financial security to policyholders and their beneficiaries.

    Key Features:

    • Provides financial protection: Ensures your loved ones are financially secure in case of your demise.

    • Types of plans: Term insurance, whole life insurance, endowment insurance, etc., each meeting different needs.

    • Death benefit: Sum assured is paid to beneficiaries upon death.

    • Maturity benefit: A lump sum is paid on policy maturity in some plans.

    • Tax benefits: Premiums qualify for tax deductions under Section 80C.

  5. Bank Fixed Deposit (FD):

    A Bank Fixed Deposit (FD) is the best safe investment in India. It offers security and reliability to investors while providing fixed returns over a specified period.

    Key Features:

    • Guaranteed returns: Offers fixed interest rates, ensuring predictable returns.

    • Term flexibility: Available in various durations, ranging from a few months to several years.

    • Limited liquidity: Money is locked in for the chosen term, affecting accessibility.

    • Lower returns compared to other options.

  6. National Pension Scheme (NPS):

    The National Pension Scheme (NPS) is a retirement savings scheme by the government that offers individuals a safe investment with high returns in India.

    Key Features:

    • Retirement planning: Creates a retirement corpus through regular contributions.

    • Tax benefits: Contributions qualify for tax deductions under Section 80C and additional deductions under Section 80CCD(1B).

    • Market-linked returns: Invests in a mix of equity and debt, offering potentially higher returns than FD.

    • Lock-in period: Money remains locked until retirement, except for a partial withdrawal after 60 years of age.

    • Professional management: Funds managed by professional fund managers.

  7. Post Office Savings Scheme:

    Post Office Savings Schemes are one of the safest ways to invest money in India. They are saving schemes offered by the post office and backed by the government offering secure investments with attractive returns, making them among the best safe investment options in India.

    Key Features:

    • High safety: Government-backed schemes offer high security.

    • Variety of options: Includes savings accounts, time deposits, recurring deposits, etc.

    • Easy access: Widely available branches across the country.

    • Competitive interest rates: Rates are generally lower than bank FDs.

    • Lower investment limits compared to other options.

    The current interest rates for some of the most popular schemes are as follows:

    • Post Office Savings Account: 4.00% p.a.

    • Post Office Time Deposit Account: 6.90% to 7.50% p.a.

    • Post Office Recurring Deposit Account: 6.70% p.a.

    • Sukanya Samriddhi Yojana: 8.20% p.a.

    • Senior Citizen Savings Scheme: 8.20% p.a.

    • Monthly Income Scheme: 7.40% p.a.

  8. Recurring Deposit (RD):

    A Recurring Deposit (RD) is a safe investment option in India that allows individuals to regularly deposit a fixed amount of money into their account over a predetermined period. It is considered one of the safest ways to invest money, offering a consistent return on investment at the end of the deposit tenure

    Key Features:

    • Interest: Earns compounded interest, generally offering higher rates than savings accounts.

    • Tenure: Flexible options ranging from 1 year to 10 years or more.

    • Investment: Minimum amount varies depending on the post office.

    • Premature Withdrawal: Allowed with penalty charges.

    • Tax Benefits: No tax benefits.

  9. National Savings Certificate (NSC):

    A National Savings Certificate (NSC) is a government-backed savings instrument in India that offers a secure investment option with guaranteed returns. It is considered one of the safest ways to invest money, providing stable returns over time.

    Key Features:

    • Interest: Fixed interest rate compounded annually, paid at maturity.

    • Tenure: Various options like 5 years, 10 years, and more.

    • Investment: Minimum Rs. 100, maximum Rs. 1.5 lakh per person per financial year.

    • Premature Withdrawal: Not allowed before maturity.

    • Tax Benefits: Interest income taxable.

  10. Post Office Monthly Income Scheme (POMIS):

    The Post Office Monthly Income Scheme (POMIS) is one of the safest ways to invest money in India. It offers regular monthly income to investors and is considered a reliable option for safe investments with high returns in India.

    Key Features:

    • Interest: Currently 7.4% per annum, paid monthly.

    • Investment: Minimum Rs. 1000, maximum Rs. 9 lakh for single account, Rs. 15 lakh for joint account.

    • Tenure: 5 years, automatically renewed on maturity.

    • Premature Withdrawal: Allowed after 1 year with penalty charges.

    • Tax Benefits: Interest income taxable.

  11. Senior Citizen Savings Scheme (SCSS):

    The Senior Citizen Savings Scheme (SCSS) is one of the safest ways to invest money for senior citizens in India. It offers safe investments with high returns, making it an attractive option for seniors looking for secure financial avenues.

    Key Features:

    • Interest: Currently 8.2% per annum, compounded quarterly.

    • Eligibility: 60 years and above (relaxed norms for retired personnel).

    • Investment: Minimum Rs. 1000, maximum Rs. 30 lakh.

    • Tenure: 5 years.

    • Premature Withdrawal: Allowed after 1 year with penalty charges.

    • Tax Benefits: Interest income taxable.

  12. Pradhan Mantri Vaya Vandana Yojana (PMVVY):

    Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed pension scheme aimed at providing a monthly pension for 10 years after a lump sum investment. It offers guaranteed returns, making it one of the safest ways to invest money post-retirement.

    Key Features:

    • Interest: Currently 7.4% per annum, paid monthly.

    • Eligibility: 60 years and above.

    • Investment: Minimum Rs. 1.5 lakh, maximum Rs. 7.5 lakh.

    • Tenure: 10 years.

    • Premature Withdrawal: Not allowed.

    • Tax Benefits: Interest income taxable.

  13. Atal Pension Yojana (APY)

    Atal Pension Yojana (APY) is a government-backed pension scheme in India, offering a safe investment avenue for individuals seeking a secure retirement future.

    Key Features:

    • Eligibility: Open to Indian citizens aged 18-40 with a savings bank account.

    • Contribution: Regular monthly contributions ranging from Rs. 60 to Rs. 5000 depending on the desired pension amount.

    • Government Matching: Government contributes Rs. 50/month for contributions of Rs. 60/month and Rs. 100/month for contributions of Rs. 120/month or more.

    • Pension: Guaranteed monthly pension starting at age 60 years, ranging from Rs. 1000 to Rs. 5000 depending on contributions.

    • Tax Benefits: Contributions qualify for tax deductions under Section 80CCD(1D) of the Income Tax Act.

  14. Gold

    Gold is widely considered the safest investment option in India due to its historical stability, liquidity, and ability to preserve wealth. It serves as a reliable hedge against economic uncertainties, offers diversification benefits, and holds significant cultural value. Investors often turn to gold as a secure asset that provides financial security and stability in times of market volatility and inflationary pressures.

    Key Features:

    • Investment options: Physical gold (bars, coins), gold ETFs, digital gold, gold savings schemes.

    • High liquidity: Easily convertible to cash.

    • Historical value appreciation: Has shown long-term value growth but prone to price fluctuations.

    • No income: Does not generate regular income unless held in gold savings schemes.

    • Safest Option: Considered a safe investment with high returns in India.

  15. Savings Bonds

    Debt instruments issued by the government offering fixed interest rates for a specified period.

    Key Features:

    • Types: Sovereign Gold Bonds (SGBs), Floating Rate Savings Bonds, Senior Citizen Savings Scheme (SCSS), etc.

    • High security: Backed by the government, considered safe investments with high returns in India.

    • Fixed interest: Offers guaranteed returns over the investment period.

    • Liquidity: Some bonds offer premature withdrawal options, while others are less liquid.

    • Tax benefits: Some bonds offer tax benefits on interest earned.

Comparison of Top Safe Investments in India with High Returns

Investment Return Potential Risk Suitable for
Capital Guarantee Plan Moderate-High Low All
ULIP Moderate-High Medium All
Life Insurance Moderate-High Medium  All
Public Provident Fund (PPF) High Nil Risk-averse investors
Bank FDs Medium Nil Risk-averse investors
NPS High Medium All
Post Office Savings Schemes Medium  Low Risk-averse investors
Recurring Deposits Low Low All
National Savings Certificate Low Low Risk-averse investors
Post Office Monthly Income Schemes (POMIS) Low  Low  All
Senior Citizen Savings Scheme (SCSS) Low Low All
Pradhan Mantri Vaya Vandana Yojana Low Low All
Atal Pension Yojana Fixed Low All
Gold Moderate-High High Risk-averse investors
Savings Bonds Moderate-High Low-Medium Risk-averse investors

Wrapping it Up!

In this time of uncertainty, everyone wants to create a secure financial future. However, to do so it is very important to have a proper understanding of your financial goals, risk appetite, investment tenure and liquidity needs. By considering these safe investments with high return options to invest in India, you can create a strong financial cushion in the long term.

Frequently Asked Questions

  • How can one choose the right investment option among safe investments with high returns in India?

    Choosing the right investment option depends on factors such as financial goals, risk tolerance, investment horizon, and liquidity requirements. Consulting with a financial advisor and conducting thorough research can help in making informed investment decisions tailored to individual needs and circumstances.
  • How does inflation impact the real returns of safe investments in India?

    Inflation erodes the purchasing power of money over time. While safe investments may offer stable returns, failing to outpace inflation could result in diminished real returns. It's essential for investors to consider the inflation-adjusted returns of their investments to ensure they maintain or increase their purchasing power over the investment horizon.
  • What is a Public Provident Fund (PPF) and why is it considered a safe investment?

    PPF is a long-term investment option offered by the Indian government, providing attractive interest rates and tax benefits. It is considered safe due to its sovereign backing and guaranteed returns.
  • How can I choose the right investment options for me?

    Your investment choices should be based on your individual risk tolerance, investment goals, and time horizon. You should also consider your age, income, and expenses. It is always a good idea to consult with a financial advisor to get personalized advice.
  • How can I minimize my investment risk?

    Diversification is one of the most important ways to minimize investment risk. By investing in a variety of asset classes, you can reduce your exposure to any one particular asset class. You can also minimize risk by investing for the long term, as this will help to smooth out the ups and downs of the market.
  • Which investment schemes in India provide tax-free returns?

    Tax-free investment options in India encompass PPF, SSY, EPF, SCSS, NSC, Tax saver FDs, NPS, ELSS, Life insurance, and more.
  • What are the best safe investments with high returns to invest in India?

    There are plethora of investmemt options available in India to invest in. However, if you want to make safe investment along with the benefit of guaranteed return then you should consider investing in these options.
    • Capital Guarantee Plan 
    • Bank Fixed Deposits 
    • Public Porvident Fund 
    • ULIP
    • NPS
    • Recurring Deposits 
  • What are the benefits of making safe investment? 

    Choosing safe investment options not only helps you to secure your fund, but it also provides an opportunity to create a financial cushion in the long term and gain a regular return on investment.  Moreover, some of these investment options also provides the advantage to save on taxes. 
  • Which investment option is better than FD? 

    capital Guarantee Solution Plan are better investment option as compared to Bank FDs as it not only provides the benefit of market return but it guarantees 100% return as on maturity of the policy, the entire premium amount is paid back to the insured along with additional benefits added to the policy. 
  • Which investment gives high return?

    Large cap mutual fund provides higher returns on investment. 
  • What are the safest tax saving  investment options available in India? 

    Some of the safest tax saving investment options to invest in India are:
    • Equity Linked Savings Scheme ( ELSS)
    • National Savings Certificate
    • Public Provident Fund (PPF) 
    • Sukanya Samriddhi Yojana (SSY)
    • Life Insurance Plan

Past 5 Year annualised returns as on 01-05-2024

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.

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