Planning is an integral part of every decision that we make in life, and so is true in the case of financial decisions. When it comes to investments, high returns and lesser risk are the ideal cases for every human being. To achieve this, you need to plan your finances best.
You need to know about the following before investing.
- Prevailing interest rates across the market
- The credibility of the financial institution and its stability
- Penalties and charges
- Additional features, and
- Your financial capabilities
Knowing these helps you evaluate and make the best out of the investment options available.
Here are the 3 best low risks, high returns investment schemes to strategise your investments:
1. Fixed deposit (FD)
Fixed deposits are the ideal investment option for many individuals because of their security and higher returns. An FD is not dependent on market fluctuations. Hence, it becomes the most reliable option when it comes to low risk and offers assured returns. While both banks and NBFC offer fixed deposits, the bank FD offers significantly less interest, and NBFC provides a much higher interest rate.
Other significant benefits of an FD are that it is tax-free if the income is less than:
1.Rs. 40,000 per year for regular citizens and
2.Rs. 50,000 for senior citizens.
They offer more flexibility regarding tenure. Institutions like Bajaj Finance also provide an FD with an option to earn two types of payouts, cumulative and non-cumulative. In cumulative FD, you invest a lump sum amount of money over a period, and you get the payout (principal+interest) post maturity (tenure end). While in case of a non-cumulative FD, you can earn regular payouts on a monthly, quarterly, half-yearly, or yearly basis.
2. Systematic Deposit Plan
A fixed deposit is a reliable option to grow your investment and requires a good amount of money to set aside for higher returns. This is a bit difficult scenario for young individuals with limited earning potential. However, Bajaj Finance Systematic Deposit Plan is the best investment option in this situation. It allows you to enjoy the stable growth of an FD at benefits similar to an SIP.
Systematic Deposit Plan serves as a saving tool that allows you to make micro-investments, on a monthly basis. You can start with an amount as low as Rs. 5,000. This investment size lies well within the people having less earning capacity. In this case, each deposit acts as a new Bajaj Finance Fixed Deposit and matures based on your selected tenure. Another unique benefit of Systematic Deposit Plan is that you enjoy new interest rates on every deposit, as applicable at the time of deposit.
You can choose to make 6 to 48 monthly deposits within a tenure ranging from 12 to 60 months. You can also automate your monthly deposits via standing instructions from your bank account. However, you need to make your first deposit via a cheque.
3. Mutual Funds - debt
A debt fund is a type of mutual fund that invests in fixed-income assets. These assets include the money market, corporate and government bonds, corporate debt securities, etc. Debt funds are also known as Bond funds and income funds.
Debt funds make money by lending your money to the government and private companies. The loan length and the borrower type determine the risk level of a debt fund. Moreover, debt funds invest in fixed-income securities, while equity funds invest in stocks and are more volatile. With debt funds, you can diversify your investment portfolio and grow your investments in better ways with less risk.
Some of the best-in-class debt mutual funds are:
- Aditya Birla Sun Life Medium Term Fund
- UTI Bond Fund
- UTI Banking & PSU Debt Fund
- Nippon India Ultra Short Duration Fund
- ICICI Prudential Short Term Fund