My friend Suresh is looking for a safe investment option. In the recent past he lost a couple of money in the stock market and now he wants to invest only in safe investment options. I know many of you must be looking for a safe investment option for investment.
To help you out I have evaluated various investment options and here are the 10 Best Safe Investments in India along with tenure, return, tax applicability, and other details.
10 Best Safe Investments in India
Bank Fixed Deposit
Tenure – 7 Days to 10 Years
Expected Return – 7-8.5%
Tax Applicability – Taxable at investor slab
A fixed deposit from a bank is said as one of the best safe investments in India because as per the guidelines of RBI, the bank needs to take insurance of the deposit placed by you.
In fixed deposits rates of return are fixed and known, there is no uncertainty. Tax is applicable as per slab on FD to avoid TDS on FD you can submit form 15H/15G. You can download 15H/15G form from here.
Fixed deposit investment gives moderate return and best for small investor.
Recurring Deposit
Tenure – 6 Months to 10 Years
Expected Return – 7-8%
Tax Applicability – No TDS by Bank but interest is taxable at investor slab
A recurring deposit is special kind of deposit where you need to deposit specific amount at monthly interval. In simple language it is making fixed deposit every month. Return of fixed deposit will be slightly higher than fixed deposit as in recurring deposit you are doing investments in parts.
Also Read – Top 10 Long Term Investment Options in India
Tax Saving Fixed Deposit
Tenure – 5 Years
Expected Return – 7-8%
Tax Applicability – Amount for Investment is deducted from your taxable income up to 1 Lac (80 C). Tax is applicable on interest income.
Tax saving deposit is another form of safe investment. Tax saving fixed deposit is fixed deposit which you can use for tax saving. Drawback with tax saving fixed deposit is your money will be locked for 5 years.
PPF (Public Provident Fund)
Tenure – 15 Years
Expected Return – 7- 8.8%
Tax Applicability – Amount for Investment is deducted from your taxable income up to 1 Lac (80 C). Return in tax-free.
PPF is one of the safe investment option. PPF will give you very good return provided you wait for 15 years. No other fixed investment instrument can match return of PPF. Even return from PPF is tax-free.
MIS (Monthly Income Scheme)
Tenure – 5 Years
Expected Return – 7- 8.4%
Tax Applicability – Interest income is taxable
MIS is post office scheme suitable for retired employees/ Senior Citizens. You can invest from 1500 Rs/- to 4.5 Lakh in this scheme. It is safe investment option as Post office is directly managed by government of India. As name suggest interest income can be withdrawn by investor on monthly basis.
SCSS (Senior citizen saving scheme)
Tenure – 5 Years
Expected Return – 7-9%
Tax Applicability – Interest income is taxable, Investment amount is eligible for 80 C deduction.
Senior citizen saving scheme is for senior citizen only. Senior citizen can visit nearest post office or designated bank to open senior citizen saving scheme account. This scheme gives good returns but investment is allowed by senior citizen only.
NSC (National Saving Certificate)
Tenure – 10 Years
Expected Return – 7-8.8%
Tax Applicability – Interest income is taxable, Investment amount is eligible for 80 C deduction.
NSC is another safe investment with decent returns. NSC can be purchased from Post office.
FMP (Fixed Maturity Plan)
Tenure – 1 Year or more
Expected Return – Depends but yet comparable to fixed deposit
Tax Applicability – Interest income is tax-efficient
FMP is another form of safe investment. Compared to FD here insurance is not taken as capital protection and returns are not fixed but yet it is found that FMP gives better returns compare to FD. FMP falls in the category of mutual funds.
Debt Mutual Funds
Tenure – Variable
Expected Return – Not fixed
Tax Applicability – Tax on capital gain and dividend
Debt mutual funds are like FMP only, return in debt mutual funds is not fixed so if you don’t want any uncertainty this option is not for you. Debt mutual funds invest money in fixed investment instruments. Debt mutual funds are easy to buy and sell. In recent past debt mutual funds has given good returns.
Saving Bank
Tenure – No maturity
Expected Return – 4 -7%
Tax Applicability – No tax applicable up to 10,000 Rs/ interest
Savings bank is another safe place to place your money, especially emergency funds. Don’t place excessive money in saving bank consider another investment options like FD etc.
So I am through with the 10 Best safe investment options Invest in this instrument based on your goal and requirements. Do let me know if I have missed anything in the above list.
