Investing is an essential part of financial planning, helping individuals build wealth and secure their financial future. However, not all investments are created equal, especially when it comes to risk. While some investors are comfortable with high-risk, high-reward opportunities, others prioritise safety and capital preservation. For those who prefer to avoid volatility and preserve their capital, safe, low-risk investments with apt returns are the way to go. This article will explore various investment options that offer stability and reasonable returns, helping you make informed decisions based on your risk tolerance and financial goals.

Safe Low-Risk Investment Options in India

Investing with minimal risk while still securing apt returns is a priority for many, especially during uncertain times. In India, several investment options offer both safety and returns, making them ideal choices for conservative investors. Below are some of the safest low-risk investment options available in India:

1. Public Provident Fund (PPF)

The Public Provident Fund (PPF) is a government-backed savings scheme that has been a popular choice for wealth creation and retirement planning since its inception in 1968. The scheme offers a 15-year tenure and can be extended in blocks of five years, making it a long-term investment option.

Key features:

• Minimum annual investment: Rs. 500; Maximum annual investment: Rs. 1.5 lakh.
• Current interest rate: 7.1% (subject to quarterly revision by the Ministry of Finance).
• Tax benefits under Section 80C of the Income Tax Act.
• Partial withdrawal allowed after 5 years.
• Loan facility available after 3 years.

PPF is an excellent choice for those looking for a Public Provident Fund with guaranteed returns and tax benefits.

2. Fixed Deposits (FD)

Fixed Deposits are among the safest and most traditional investment options in India. Offered by banks and financial institutions, FDs provide a fixed interest rate over a predetermined period, making them a reliable choice for risk-averse investors.

Key features:

• Tenure ranges from 7 days to 10 years.
• Interest rates typically range from 5% to 10% per annum.
• Interest can be compounded monthly, quarterly, or annually.
• Loan against FD facility available.

For those seeking a secure and simple investment, a Fixed Deposit remains one of the top choices.

You can consider investing Bajaj Finance Fixed Deposit. With a top-tier AAA rating from financial agencies like CRISIL and ICRA, they offer one of the highest returns, up to 8.60% p.a.

3. National Pension Scheme (NPS)

The National Pension Scheme (NPS) is a government-sponsored pension scheme aimed at providing retirement income. Initially launched for government employees in 2004, it is now open to all Indian citizens, including non-residents.

Key features:

• Open to individuals aged 18-65 years.
• Minimum annual contribution: Rs. 1,000.
• Returns vary between 8% to 14% as the scheme is market-linked.
• Tax benefits under Section 80C and Section 80CCD(1B).
• Partial withdrawal up to 25% is allowed under certain conditions.

NPS is an excellent option for those looking to secure their retirement with a National Pension Scheme that offers both market-linked returns and tax benefits.

4. National Savings Certificate (NSC)

The National Savings Certificate (NSC) is a fixed-income investment offered by the Government of India. It is a low-risk, tax-saving option available at post offices across the country, suitable for conservative investors.

Key features:

• Minimum investment: Rs. 1,000; no upper limit.
• Interest rate: 7.7% per annum.
• Lock-in period: 5 years.
• Tax benefits under Section 80C of the Income Tax Act.
• Premature withdrawals are not allowed.

NSC is ideal for those seeking a safe, long-term investment with steady returns.

5. Unit Linked Insurance Plan (ULIP)

ULIPs are insurance plans that offer the dual benefit of investment and insurance. They allow you to invest in equity and debt funds while providing life insurance coverage. ULIPs are a balanced option for those who want to grow their wealth while securing their family's future.

Key features:

• Flexible premium payment options: lump sum, monthly, quarterly, semi-annually, or annually.
• Fund-switching facility between equity and debt funds.
• Partial withdrawal allowed after a 5-year lock-in period.
• Tax benefits under Section 80C and Section 10(10D) of the Income Tax Act.

ULIPs are suitable for investors looking to combine investment and life insurance into one plan.

6. Equity-Linked Savings Scheme (ELSS)

ELSS is a type of mutual fund that invests primarily in equity markets. It is an excellent option for investors looking for tax-saving opportunities with the potential for higher returns.

Key features:

• Lock-in period: 3 years.
• Investments up to Rs. 1.5 lakh are eligible for tax deduction under Section 80C.

ELSS is ideal for investors willing to take moderate risks for potentially higher returns while enjoying tax benefits.

Conclusion

Investing in low-risk options that offer apt returns is a wise strategy, especially in uncertain times. Whether you choose a Fixed Deposit, Public Provident Fund, National Pension Scheme, or other safe investments, it's essential to align your choice with your financial goals and risk tolerance. Before making any investment, consider using an investment calculator to better understand the potential returns and select the best option for your needs.