Are you a risk-averse investor who feels uncomfortable facing market volatilities? If yes, then you can consider investing in financial instruments that offer assured returns. A well-aware investor has multiple options to get risk-free returns.
- Guaranteed Savings Plan
A guaranteed savings plan is a life insurance product that offers assured maturity benefits. You pay a premium amount for a fixed premium payment term. After that, your invested amount keeps growing during the policy tenure. Eventually, you get a lump sum amount at maturity.
Moreover, a guaranteed savings plan lets you choose the policy term and the premium payment frequency.
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- Pension Plans
If you are looking for a regular income post-retirement, then you can consider pension plans. Such plans require you to pay a lump sum amount as a one-time premium. You can either choose immediate or deferred annuity options.
- Immediate Annuity
Pension starts immediately after buying the plan.
- Deferred Annuity
You must wait for a deferment period that can be between one to ten years before you start getting a regular pension. You get guaranteed additions accrued during the deferment period.
Read more to know about the different types of Annuity Plans.
- Government Bonds
Government bonds and securities like treasury bills may provide comparatively low returns than corporate bonds. However, they are very stable and are backed by the government.
- Post Office Month Income Scheme (POMIS)
POMIS is run by the Department of Posts. You can open a POMIS account at a majority of post offices around you. You can also transfer your account from one post office to another. You can open this account by paying a lump sum amount. The interest payout would be on a monthly basis at a fixed rate of return for the scheme tenure.
POMIS has maximum investment limits as follows.
- Single Account – ₹4.5 lakhs
- Joint Account – ₹9 lakhs
- Public Provident Fund
The Public Provident Fund (PPF) allows the investor to build a large retirement corpus over a long period. While a PPF matures after fifteen years, you can further increase your maturity period in blocks of five years. At present, the annual investment limit into the PPF account is ₹1.5 lakh.
The rate of return is subject to periodic revisions by the Government of India.
- National Savings Certificate
Like POMIS, you can buy National Savings Certificate (NSC) from a post office. NSC has a lock-in period of five or ten years. You can begin investing in NSC with just ₹1,000.00. There is no maximum NSC.
- Kisan Vikas Patra
Another fixed return scheme you can buy from the post office, Kisan Vikas Patra, currently doubles your investment amount in ten years and four months. While the interest rates are subject to changes, the changed interest rates don’t apply to the plans that are already purchased.
- Savings Account
The regular bank savings account is the first choice for many to park their capital. Although the rate of return is among the lowest, a savings account can be useful as a primary account to which all your other investment instruments can be linked.
- Fixed Deposits
Fixed deposits (FDs) are offered by both banks and post offices. They offer a fixed return with interest rates varying with the offering bank.
- Recurring Deposits
If you don’t have a lump sum amount to invest, then you can consider investing a small amount every month in a recurring deposit account. You will get an assured return on maturity. Nowadays, many banks provide online calculators where you can see the exact maturity amount by inputting the recurring deposit amount you are planning to invest.
- Senior Citizens Savings Scheme
Senior Citizens Savings Scheme are similar to FDs with two main differences.
- The Scheme is open to only senior citizens of India.
- The rate of return can be higher than the regular FDs.
- Debt Funds
A debt fund is a type of mutual fund that only invests in debts and money market instruments. The maturity period can differ from 91 days to three years. Such funds provide high liquidity and usually offer higher returns than regular bank FDs.
In a nutshell, there is no dearth of choices even for the risk-averse investor. You can include different guaranteed savings options in your portfolio to maintain the diversity. The only important factor is to set practical financial goals and work relentlessly toward achieving them.
