Where Should Invest for Stable Returns

The best way to attain financial security is by saving and investing. While, saving helps one not to waste their hard-earned money, investing helps the cash to grow over time; hence making the latter ideal and efficient. The first thing to consider while developing an investment plan for stable returns is to know the budget and the desired outputs of the investment. Given below are some of the top investment options in India which can aid with this investment plan.

Fixed deposit (FD)

Fixed deposit is one of the most widespread investment options in India. It is risk-free and has a predetermined FD interest rate. Since, it is not susceptible to market rates, investors get stable returns. Returns are compounded monthly, quarterly, or annually as per the bank’s guidelines. Moreover, banks offer a higher FD interest rate for senior citizens. Fixed deposit can range from 7 days to more than ten years. 

Public Provident Fund (PPF)

Money gets locked for 15 years and investors can earn compound interest from this account. It also allows investors to extend the tenure for another five years. Investors are not allowed to withdraw money at the end of 6th year. But, they can take a loan on the balance of PPF account in case of emergencies. 

Sukanya Samriddhi Yojana (SSY)

The account can only be opened by a legal guardian of the girl child which was introduced to promote the welfare of the child. SSY can be opened with as low as Rs.1,000 and has a tenure of 21 years. SSY offers an interest rate of 8.6% which is paid monthly or compounded annually. The amount invested, the amount withdrawn, and the interest received are all exempt from payment of tax in this scheme.

Senior Citizen Saving Scheme (SCSS)

SCSS is risk-free and is one of the ideal tax saving investment options. SCSS offers citizens above the age of 60 years with regular income and at very high interest rates. Investors can invest a maximum of Rs.15 lakh for five years. This tenure can later be extended to 3 years. 

National Pension System (NPS)

NPS is a government initiative to provide pension solutions. The funds are invested in bonds, government securities, equity, and other investment alternatives as per the will of the investor. NPS offers two choices namely auto and active. Under auto, the funds get invested automatically in various assets. Whereas, in the case of active, the investor gets to make a choice. NPS only matures when the depositor turns 60 and therefore has an age-dependent lock-in period. Not only is the interest tax-free but if investors choose to avail the lump sum payment upon maturity, 40% of it is tax exempt. The amount is taxable if investors wish to receive a pension after maturity.

The bottom line:

Apart from fixed deposit, PPF, SSY, SCSS, and NPS; there are other investment options, most of which are risky and might not give stable returns. Hence, thoroughly research each scheme to come up with the best Investment plan.