A List of Safe Investment Plans Offering high returns in India

In a fast-paced world with ever-rising expenses and the desire for financial stability, investing wisely has become more crucial than ever. However, when you enter the investment market, it can become a challenging task for you if you are not aware of the risks involved in the same. For those with low-risk appetite, it becomes all the more important to keep the risk factors in mind. For such investors, there are a number of safe investment plans like SIP that offer high returns without many risks involved. So, in this comprehensive guide, we will explore these safe investment options that promise high returns.

What are Safe Investment Plans?

As the name suggests, safe investment plans are those that involve less risk than compared to other investment plans. In a safe investment plan, your money is invested in plans that involve lesser market risks. Simply put, your money is invested in plans that offer great returns. Some of the factors that you need to consider while investing in an investment plan:

• Age
• Savings
• Future goals
• Financial dependants
• Gender

Safe Investment Plans in India

Safe investment plans are financial instruments designed to protect your capital while providing opportunities for substantial returns. These plans are particularly suitable for individuals who prioritise capital preservation alongside wealth creation. Below, we delve into some of the safest investment options available in India:

SIP (Systematic Investment Plan)

SIP, or Systematic Investment Plan, is one of India's most popular and safe investment plans. It enables investors to contribute regularly to mutual funds, making it an excellent choice for those wanting to enter the world of investments without risking a lump sum.

Some of the benefits of investing in a SIP plan are as follows:

• Risk Diversification: SIP spreads your investment across various assets, reducing the impact of market volatility.
• Rupee Cost Averaging: It mitigates the effects of market fluctuations by purchasing more units when prices are low and fewer when they are high.
• Power of Compounding: Over time, SIP harnesses the power of compounding, multiplying your wealth exponentially.

ULIP (Unit Linked Insurance Plan)

ULIPs are a type of financial product that offers both life insurance and investment opportunities. They provide policyholders with the flexibility to choose between equity, debt, or a balanced fund based on their risk appetite.

There are several benefits of buying a ULIP such as those listed below

• Tax Benefits: ULIPs offer tax deductions under Section 80C and tax-free maturity proceeds under Section 10(10D) of the Income Tax Act.
• Fund Switching: You can switch between funds to adapt to changing market conditions. However, the number of free switches varies from one insurer to another. 
• Transparency: ULIPs offer transparency in fund performance and charges.

PPF (Public Provident Fund)

The Public Provident Fund is a government-backed, long-term investment option known for its safety and guaranteed returns. It is a preferred choice for conservative investors looking for steady, risk-free growth. 

Listed below are some of the benefits of PPF:

• Maturity period: It has a maturity period of 15 years and thus the plan offers great returns
• Safe returns: It is backed by the government of India and is thus a safe investment option.
• Tax benefits: PPF offers tax benefits as specified under section 80C of the Income Tax Act of 1961. 

Fixed Deposits

Fixed deposits or bank FDs are a type of investment option offered by different banks that provide a fixed interest rate over a specific tenure. Here are the benefits of bank FDs:

• Fixed returns: They offer fixed returns, thus making them a secure choice for risk-averse investors. Fixed deposits offer the comfort of assured returns with minimal risks.
• Higher interest rates: The interest rate offered varies from one bank to another, thus choose a financial institution that offers higher interest rates.
• Tax-saving FDs: There are tax-saving FDs available that let investors also save on taxes while investing in fixed deposits at the same time. 

National Pension System (NPS)

NPS is a retirement-focused investment plan that offers tax benefits and the opportunity for capital appreciation. It ensures a secure financial future during your golden years. Here are the reasons why you should invest your money in the National Pension Scheme: 

• Regular Income Even After Retirement: NPS is tailored for senior citizens and provides a high interest rate, making it a safe haven for retirees seeking regular income.
• Backed by Government: The NPS is backed by the Pension Fund Regulatory and Development Authority or PFRDA and is thus a safe investment option. 

How to Choose the Right Investment Plan?

To help you out, we have enlisted some useful tips for choosing the right investment plan for yourself: 

• Align with Your Financial Goals

Your investment choices should align with your financial objectives, whether it's wealth creation, retirement planning, or saving for specific goals like education or home purchase. You should be clear regarding your future goals and accordingly invest in an investment plan. For instance, if your future goal is to buy a dream house, then you should invest an adequate amount for the same.

• Assess Your Risk Tolerance

Evaluate your risk tolerance before making an investment decision. While safe investment plans offer stability, they may yield lower returns compared to riskier options. So, before investing in any plan, make sure to check how that plan has been performing in the past few years. 

• Diversify Your Portfolio

Diversification involves spreading your investments across various asset classes to reduce risk. A mix of safe investments like SIP, ULIP, fixed deposits, and PPF can provide a balanced and secure portfolio.

• Consult A Financial Advsior

Consult with a financial advisor to tailor a strategy that aligns with your financial aspirations and risk tolerance. Safe investments may offer lower returns, but they serve as a cornerstone of a well-rounded investment portfolio, ensuring a stable foundation for your financial future. Invest wisely, secure your wealth, and watch it grow over time.

Conclusion

Thus, safe investment plans such as SIP, ULIP, PPF, and fixed deposits offer security, consistent returns, and a range of benefits. To make informed investment decisions, consider your financial goals, risk tolerance, and the investment options available. Remember, the best investment plan for you depends on your individual circumstances and objectives. 

FAQs

• What are some of the safe investment options in India?

Some of the safe investment options in India include SIPs, PPFs, NPSs, Bank fixed deposits, and more.

• What are the factors to consider when investing?

Some of the factors that you need to consider when investing include age, income, gender, profession, and others.

• Can I get guaranteed returns with bank FDs?

Yes, bank FDs offer guaranteed returns after a specific period of time.