7 Ways to Invest Your Money the Smart Way | Tata AIA Blog (2024)

26-April-2022 |

What are the Safest Investments with the Best Returns?

1. Public Provident Fund (PPF)

The interest earned and principal invested in a PPF is backed by a sovereign , and thus makes for a safe and smart investment. Since PPFs have a tenure of 15 years, the impact of compounding tax-free* interest is huge.

2. Fixed Deposits (FDs)

A bank fixed deposit is one of the safest investment instruments providing moderate and stable returns. Depositors’ investments are insured up to ₹5 lakhs, which applies for both the principal and the interest amount.

Based on your requirements, you can choose to opt for monthly, quarterly, half-yearly, yearly, or cumulative interest options. However, keep in mind that the interest accrued becomes part of your income and will be taxed* as per your slab.

3. Mutual Funds

Mutual funds offer you the advantage of investing indirectly into stock markets using the expertise of professional managers. Equity mutual funds contains risk factor as the money is predominantly invested in volatile equity stocks.

Debt mutual fund schemes are suitable for investors who want fixed, steady returns. Compared to equity mutual funds, they’re a lot less volatile. Debt mutual funds primarily invest in fixed-interest securities such as corporate bonds, government securities, treasury bills, commercial paper, and various other money market instruments.

However, mutual funds are not risk-free. Investors should know the related risks before investing. These days, there are countless

online investment

options that let you assess the performance of various mutual funds in real-time.

4. Direct Equity

Stocks are a risky and volatile asset class . Apart from picking the right stock, timing your entry and exit is also very important. The risk of losing a part or even all of your capital is high unless you are careful and know what you are doing.

To reduce the risk to a certain extent, you could diversify across different sectors and market capitalizations. That being said, over long periods, investing directly into stocks has been able to deliver higher returns compared to all other classes of assets.

5. Government Schemes

If you’re over 60 years of age, the Senior Citizens' Saving Scheme (SCSS) should be a must-have in your investment portfolio. It can be availed from a post office or bank.

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) has a tenure of 10 years and is intended for senior citizens aged 60 years and above to provide them with an assured return of 7.4 per cent per annum.

You can opt for pension income payable monthly, quarterly, half-yearly or yearly as per your convenience. The minimum pension amount is ₹1,000, while the maximum is ₹9,250 per month.

6. Non-financial Assets

Investments such as gold or real estate certainly add to your long-term investments owing to their ever-increasing prices. Investments in real estate deliver returns either through capital appreciation or rentals. Thus, the location of the property is the single most important factor that will determine the value of your property as well as the rent you can earn from it.

Alternatively, if gold is your thing, you may choose to invest in gold biscuits, Gold Exchange-Traded Funds (ETFs), gold mutual funds, or even gold deposit schemes.

7. Life Insurance Plans

• Go to the website.

• Under plans, select Savings Solutions or Unit Linked Insurance Plans based on your preference.

• Browse the different plans available.

• Finalise a plan based on your specific investment and financial needs.

• Follow the easy step-by-step process, pay the premium online and get a soft copy of the policy on your official email ID.

Conclusion

L&C/Advt/2022/Apr/0857

People Like You Also Read