Investment Plan |
Description |
Returns |
Risk Level |
Tax Benefits |
Low Risk Investment Options |
Public Provident Fund (PPF) |
Long-term savings scheme backed by the Indian government, offering fixed returns and tax benefits. |
Moderate |
Low |
Tax-free interest; Deduction under Section 80C |
Fixed Deposits (FD) |
Investment option where a fixed sum is deposited for a specific period, providing fixed returns. |
Low |
Low |
Interest income taxed; Deduction under Section 80C in Tax-Saver FDs only |
National Pension System (NPS) |
Retirement savings scheme regulated by the government, allowing contributions for retirement income. |
Moderate |
Moderate |
Tax deduction under Section 80CCD, partial tax exemption |
RBI Bonds |
Securities issued by the Reserve Bank of India, offering fixed returns and considered low-risk. |
Low to Moderate |
Low to Moderate |
Interest income taxed, no specific tax benefits |
Medium Risk Investment Options |
ULIP (Unit Linked Insurance Plan) |
Insurance cum investment plan offering market-linked returns, combining insurance and investment. |
Variable |
Moderate to High |
Tax deduction under Section 80C, tax-free maturity proceeds |
Equity Linked Savings Scheme (ELSS) |
Mutual fund scheme with a lock-in period, investing primarily in equity markets for tax benefits. |
High |
High |
Tax deduction under Section 80C, potential high returns |
Debt Mutual Funds |
Mutual funds investing in fixed-income securities like bonds and government securities for stability. |
Low to Moderate |
Low to Moderate |
Taxation on gains, indexation benefit for long-term gains |
High Risk Investment Options |
Equity Mutual Funds |
Mutual funds invest primarily in stocks, offering diversification and professional management. |
High |
High |
Tax on gains, long-term gains tax benefits |
Real Estate Investment Trusts (REITs) |
Investments allow investors to own shares in real estate properties and earn dividends. |
Moderate |
Moderate |
Taxation on gains, dividends taxed at applicable rates |
Stock Trading |
Direct investment in stocks of companies listed on stock exchanges. |
Based on stock performance |
High |
Capital gains taxed, tax on dividends. |