For many investors, the safety and security of their money matter more than chasing high returns. Some people prefer to avoid the risks associated with stock markets and are satisfied with returns that can beat inflation. If you belong to this category, there are plenty of safe and government-backed investment options available that offer stable returns without much risk. Let’s take a closer look at some of these reliable options, including government schemes, bank deposits, and bonds.
Bank Fixed Deposits (FD): A Traditional Safe Haven
Bank Fixed Deposits (FDs) are one of the most trusted and oldest investment options in India. Senior citizens, in particular, prefer this scheme as it provides a fixed return known at the time of investment. The best part is that bank deposits are insured up to Rs. 5 lakh, ensuring some level of protection in case of a bank failure or financial issues. FDs offer a variety of tenures, allowing investors to choose between short-term and long-term options. While the interest rates on FDs vary across banks, the safety and predictability make it an attractive choice for conservative investors.
Public Provident Fund (PPF): A Government-Backed Long-Term Option
Public Provident Fund (PPF) is another popular and safe investment option, particularly for long-term goals like retirement. With an interest rate of 7.1% (as of the latest review), it offers better returns compared to most bank deposits. One of the main attractions of PPF is that it enjoys tax benefits under Section 80C, and the interest earned is completely tax-free. PPF has a lock-in period of 15 years, which makes it ideal for those looking to grow their wealth over the long term. The government reviews the interest rate periodically, ensuring that it remains competitive.
Recurring Deposits (RD): A Disciplined Savings Option
If you prefer to save a fixed amount every month, a Recurring Deposit (RD) with a bank is a great option. RDs offer a higher interest rate compared to regular savings accounts and allow you to build a substantial corpus over time. The flexibility to choose the tenure and deposit amount makes RDs suitable for various financial goals, like children’s education or marriage. However, unlike PPF, RD investments do not offer tax benefits.
Post Office Monthly Income Scheme (POMIS): Regular Monthly Income
For those looking for a steady source of income, the Post Office Monthly Income Scheme (POMIS) is a reliable choice. With an interest rate of 7.4%, POMIS allows you to invest a lump sum and earn a regular monthly income. This scheme is particularly beneficial for retirees or individuals who want a regular return on their investments. Since it is a government-backed scheme, it provides the peace of mind that comes with security and stability.
RBI Floating Rate Savings Bonds: A High-Interest Secure Bond
If you prioritize safety and are willing to invest for the medium term, the RBI Floating Rate Savings Bonds are an excellent option. These bonds mature in seven years and offer an attractive interest rate of 8.05%, higher than most fixed-income investments. A minimum investment of Rs. 1,000 can be made in these bonds, making it accessible to many investors. Moreover, the interest on these bonds is adjusted every six months, ensuring that your returns remain competitive. You can invest in these bonds through the RBI Retail Direct portal.
