Investing is an essential aspect of personal finance management. However, it can be a daunting task to choose between various investment options. With traditional or safe investment options offering low returns, investors are always on the lookout for safe investments with high returns in India. This article will discuss the safest investment options available in India that offer high returns.
List of top 10 safe investments in India with high returns
Here are a list of top 10 safe investment options with high returns:
1. Fixed Deposit
Fixed deposits (FDs) are the most known and utilised investment options in India. It is a secure and safe investment option that guarantees returns, making it one of the best safe investments. FDs offer a fixed interest rate for the duration of the investment, which can range from one month to ten years. The interest rate is typically higher than that offered by savings accounts, which makes it lucrative for investors looking for safe investing options. With Bajaj Finance Fixed Deposit offering interest rates of up to 7.30% p.a., you can open a FD with us in minutes because of our 100% online journey.
2. Public Provident Fund (PPF)
The Public Provident Fund (PPF) is another widely preferred safe investment option in India, backed by the government. You can open a PPF account at any post office or authorised bank. One of its biggest advantages is that the returns are completely tax-free, making it a tax-efficient way to grow your savings.
PPF also offers higher guaranteed returns compared to regular savings accounts. However, both the interest rate and minimum investment requirements are subject to periodic revisions by the government.
3. National Pension Scheme (NPS)
The National Pension Scheme (NPS) is a government scheme that offers investors good returns with minimal risk. The NPS is ideal for those looking for long-term investments as it provides substantial returns over a more extended period. The scheme offers three types of funds - equity, corporate bonds and government securities, which give investors the flexibility to choose their preferred investment strategy. The returns on the NPS vary based on market performance, but the average of the last five years hovers around 10% per annum.
4. Gold
It is a popular investment option, primarily due to its high liquidity and intrinsic value. Gold has historically been an excellent hedge against inflation, making it a reliable investment option. Investors can invest in gold in several ways, such as physical gold, gold ETFs, or gold funds. However, physical gold comes with issues such as safe storage, making gold ETFs and gold funds a safer investment alternative.
5. Recurring Deposit (RD)
A Recurring Deposit (RD) is a savings scheme offered by banks that helps investors accrue a fixed amount at regular intervals. An RD account can be opened for a minimum of six months and a maximum of ten years. The interest rates on RD vary from bank to bank and are slightly higher than the interest offered by a savings account. Bajaj Finance Systematic Deposit Plan is also one such investment option. It comes with multiple investment tenures and an amount.
6. Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana is a government-backed savings scheme created to secure the financial future of a girl child. It helps parents or legal guardians build a dedicated fund for her higher education and marriage.
Backed by the Government of India, ensuring high safety.
Eligible for tax deductions under Section 80C of the Income Tax Act.
Both the interest earned and the maturity amount are tax-free, making it an EEE (Exempt-Exempt-Exempt) investment.
The account matures after 21 years from the date of opening or upon the girl’s marriage once she turns 18.
Minimum deposit: Rs. 250; Maximum: Rs. 1.5 lakh per financial year.
Contributions must be made for 15 years from account opening.
7. National Savings Certificate (NSC)
The National Savings Certificate is a fixed-income, government-backed investment ideal for conservative investors looking for guaranteed returns over a medium term.
Offers fixed interest rates, usually higher than regular savings accounts.
Backed by the Government of India, ensuring capital protection.
Eligible for deductions under Section 80C.
Interest is reinvested annually, compounding the returns.
Comes with a 5-year lock-in period.
8. Atal Pension Yojana (APY)
Atal Pension Yojana is a government-initiated pension scheme targeted at workers in the unorganised sector, offering financial stability post-retirement.
Designed for individuals aged 18 to 40; contributions continue until age 60.
Provides guaranteed monthly pension of Rs. 1,000 to Rs. 5,000 after retirement.
Contribution amount depends on the desired pension and joining age.
Low-cost, secure investment with long-term benefits.
9. Post Office Savings Schemes
Post Office Savings Schemes are trusted, government-backed options that offer a range of secure investment products with attractive returns.
High financial safety with government guarantee.
Competitive interest rates, often better than bank savings accounts.
Tax benefits under Section 80C for select schemes.
Ideal for risk-averse investors looking for steady, stable returns.
Current Interest Rates (as of latest update):
Post Office Savings Account: 4.00% p.a.
Time Deposits: 6.90% to 7.50% p.a.
Recurring Deposit: 6.70% p.a.
Sukanya Samriddhi Yojana: 8.20% p.a.
Senior Citizen Savings Scheme: 8.20% p.a.
Mahila Samman Savings Certificate: 7.50% p.a.
Kisan Vikas Patra: 7.50% p.a.
10. Post Office Monthly Income Scheme (POMIS)
POMIS is a low-risk investment option that provides fixed monthly income, making it an excellent choice for retirees and income-focused investors.
Government-backed with assured monthly payouts.
Fixed 5-year lock-in period with early withdrawal allowed (penalty applies).
Ideal for those seeking regular income without market risk.
Interest earned is taxable as per your income slab.
Investing in safe investment options with high returns is critical to ensure a successful financial portfolio. Among all, a fixed deposit is one of the safest investment options offering high returns. Investors considering Bajaj Finance Fixed Deposit for their financial goals and portfolio diversification will be at peace since it comes with CRISIL AAA/STABLE and [ICRA]AAA ratings making it one of the safest investment options in the country.
Benefits of choosing safe investment options
Opting for secure investment avenues comes with several key advantages that support both short- and long-term financial goals:
1. Capital Protection
Safe investments help preserve your principal amount, minimizing the risk of loss. This is especially important for individuals nearing retirement or those with low risk tolerance.
2. Consistent and Predictable Returns
Though returns may be moderate, they are steady and reliable. This predictability aids in better financial planning and long-term budgeting.
3. Lower Risk and Volatility
These options are less impacted by market ups and downs, offering a sense of security and reducing financial stress.
4. Financial Security
Safe investments form a strong foundation for your financial portfolio, ensuring stability during uncertain times.
5. Compound Growth
Options like Fixed Deposits and PPFs offer the benefit of compound interest, helping your wealth grow gradually but steadily.
6. Tax Benefits
Some safe investment instruments also come with tax-saving advantages under sections like 80C, helping reduce your overall tax burden.
7. Simplicity and Accessibility
Most safe investments are easy to understand and manage, making them ideal for beginners or conservative investors.
How to choose the best safe investment options with high returns in India?
Choosing the right investment requires a balance between safety and growth. Keep these essential factors in mind:
1. Define Your Financial Goals
Start by identifying your financial goals—whether it's retirement, a child’s education, or wealth creation. Clear goals help you pick investments that align with your objectives.
2. Know Your Risk Tolerance
Understand how much risk you’re comfortable taking. This helps you select investments that match your risk appetite and financial situation.
3. Explore Suitable Investment Options
Evaluate stable instruments such as Capital Guarantee Plans, Guaranteed Return Schemes, Fixed Deposits, RBI Bonds, and Debt Mutual Funds. These typically offer moderate returns with lower risk.
4. Use Systematic Investment Plans (SIPs)
SIPs help you invest regularly, promote discipline, and average out market volatility over time, making them ideal for long-term wealth creation.
5. Focus on the Long-Term
Adopting a long-term approach helps you benefit from the power of compounding and ride out short-term market fluctuations.
6. Check Historical Performance
Review past performance to get a sense of how an investment has fared over time. While it’s not a guarantee, it helps set expectations.
7. Look for Tax Benefits
Some investments offer tax deductions under schemes like ULIPs, NPS, or tax-saver FDs. These can help reduce your taxable income while building your portfolio.
8. Diversify Your Portfolio
Spread your investments across different asset classes to manage risk and improve the chances of consistent returns.
9. Compare Fees and Charges
Each investment option may come with fees or hidden costs. Always compare charges to avoid unnecessary expenses eating into your returns.
10. Assess Liquidity
Consider how easily you can access your money. Some investments lock in your funds, while others provide easier withdrawal options.
11. Account for Inflation
Ensure your investment can generate inflation-beating returns so that your purchasing power doesn’t erode over time.
12. Trust the Right Institutions
Invest through reputable and financially stable institutions. A strong track record adds a layer of safety to your investments.
13. Review and Rebalance Periodically
Regularly check your portfolio to ensure it stays aligned with your goals and risk profile. Rebalancing helps maintain the right asset mix.
Conclusion
In today’s uncertain times, building a secure financial future is a priority for many. To achieve this, it’s essential to clearly understand your financial goals, risk tolerance, investment horizon, and liquidity requirements. By choosing safe, high-return investment options available in India, you can lay the foundation for long-term financial stability.
