Top Investment Options in India with Very Low-Risk Rate

It’s true. When it comes to investing, most of us want to secure maximum returns while steering clear of any risk. It’s too good to be true, however, as most market-linked investment options carry some kind of risk.

But, you can still diversify your portfolio with options that dodge market fluctuations while moving towards your financial goals. Today, there are numerous low-risk investment ideasin the market that offer guaranteed returns.

So, you might be unsure of where to put your hard-earned money. To make things less confusing, here are some of the top investment avenues in India with very low-risk rates.

Fixed deposit (FD)

Fixed deposits are one of the safest forms of investment that offer assured returns. With FDs, you invest a specific amount of money for a fixed time frame (called lock-in or maturity period). The principal amount earns you a good rate of interest that is typically higher than a savings account.

And you can withdraw your money on maturity along with the returns. Investing in an FD account through a trusted financial institution might offer additional benefits. These include higher credibility, periodic interest pay-outs, flexibility, etc.

Money market funds

A money market fund is a kind of mutual fundknown for protecting your money’s value. These funds invest in liquid, low-risk instruments such as certificates of deposits (CDs), commercial papers, Treasury bills (T-bills), short-term bonds, etc. to diversify risk.

You should park your extra cash in these mutual funds to earn moderate but immediate returns. Since market volatilities have small to no impact on these schemes, your principal usually stays safe. You can choose a lump-sum payment or opt for a Systematic Investment Plan (SIP) for investing in such funds.

Additional Read: What should be your investment strategy in a post Covid world?

National Pension Scheme (NPS)

The Pension Fund Regulatory and Development Authority of India (PFRDA) manages the National Pension Scheme (NPS). As its name suggests, NPS is a retirement scheme designed for long-term investment.

It is an amalgamation of several instruments such as corporate bonds, fixed deposits, liquid funds, etc. if you are 18-60 years old, you can invest in NPS through two kinds of accounts – Tier 1 and Tier 2. A Tier 1 account requires a minimum investment of Rs. 500 while a Tier 2 account needs only Rs 250. There is no cap on the maximum investment amount.

Since it is a government-supported initiative, it carries a low risk. Still, the returns may vary depending on the proportions invested in debt and equity.

Public Provident Fund (PPF)

The Public Provident Fund (PPF) is also a well-known government-backed scheme. It is backed by sovereign guarantees that make it one of the safest investment avenues. It has an extended lock-in period of 15 years and offers decent interest rates.

Additional Read: Why do you need an investment mandate?

Try Tata Capital’s Moneyfy app for hassle-free investments

Want to start investing? Get on Tata Moneyfy's mutual fund app – an intuitive platform to meet your financial needs. You can easily invest according to your risk appetite, investment goals and financial situation – all on your smartphone.

Compare and track a wide range of mutual funds and make investments in a few taps! We also offer insurance and even loans. So, what’re you waiting for? Start growing your money by downloading the app today!