How can one choose the right investment option among safe investments with high returns in India?

Choosing the right investment option depends on factors such as financial goals, risk tolerance, investment horizon, and liquidity requirements. Consulting with a financial advisor and conducting thorough research can help in making informed investment decisions tailored to individual needs and circumstances.

How does inflation impact the real returns of safe investments in India?

Inflation erodes the purchasing power of money over time. While safe investments may offer stable returns, failing to outpace inflation could result in diminished real returns. It's essential for investors to consider the inflation-adjusted returns of their investments to ensure they maintain or increase their purchasing power over the investment horizon.

What are the benefits of making safe investments?Â

Choosing safe investment options not only helps you to secure your fund but it also provides an opportunity to create a financial cushion in the long term and gain a regular return on investment. Moreover, some of these investment options also provide the advantage of saving on taxes.

Safe Investments with High Returns in India

Investing in India offers many opportunities for Non-Resident Indians (NRIs) seeking safe investments with high returns. India’s strong economic growth and diverse financial market provide a solid foundation for maximizing investment potential while managing risk. Understanding the unique benefits, repatriation rules, and tax implications of each option can help NRIs make informed decisions to grow their wealth securely and efficiently.

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Disclaimer: # The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 2 Cr. is for a 30 year old healthy individual investing Rs 18,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: 1,06,79,507 @ CAGR 4%; 2,12,15,817 @ CAGR 8%. All plans listed here are of insurance companies’ funds. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

What are the Safe Investment Options with High Returns in India?

Exploring safe investment options with high returns in India is important for NRIs aiming to grow their wealth while minimizing risk. Understanding these options can help NRIs make informed financial decisions aligned with their goals and risk tolerance. Below are some of the best investment options in India that offer both safety and high returns.

Capital Guarantee Plan

A Capital Guarantee Plan is an investment plan that ensures the protection of your initial investment while providing market-linked returns. This plan typically invests in a mix of debt and equity funds with the insurance company's guarantee, making it a safe investment with high returns in India for NRIs.

Key Features:
- Dual Benefit: Combines guaranteed capital protection with potential market-linked returns.
- Guaranteed Return: At maturity, you will receive your initial investment (premium) back, regardless of market performance.
- Market Participation: A portion of your premium is invested in equities or debt funds, offering growth potential.
- Policy Term: Usually 10 years with a premium payment term of 5 years.
- Fund Allocation: Typically splits investment 50%-60% into debt and equities, ensuring stability for NRIs.
Unit Linked Insurance Plans (ULIPs)

ULIPs are safe investments with high returns in India. They offer the dual benefits of life insurance coverage and investment in market-linked units. NRIs can choose between debt and equity funds based on their risk appetite, providing flexibility and potential for high returns.

Key Features:
- Investment + Insurance: Combines life insurance coverage with market-linked investments.
- Investment Flexibility: Choose from various equity, debt, or hybrid funds based on your risk appetite.
- Potential High Returns: Equity exposure offers the chance for significant growth.
- Lock-in Period: Usually 5 years, restricting withdrawals during this period.
- Tax Benefits: Premiums qualify for tax deduction under Section 80C (up to ₹1.5 lakh) and other tax benefits under Section 10(10D).
Public Provident Fund (PPF)

The PPF is a government-backed savings scheme, regarded as one of the safest and best investment options in India. It offers guaranteed returns along with tax benefits, making it ideal for long-term wealth creation.

Key Features:
- Government-Backed Scheme: Offers guaranteed returns and high security.
- Long-Term Investment: Investment tenure of 15 years with extension options.
- Tax Benefits: Contributions qualify for tax deduction under Section 80C (up to ₹1.5 lakh).
- Interest Rate: Currently offers 7.1% compound interest annually.
- Partial Withdrawals: Allowed after 5 years with restrictions.
Life Insurance

Life insurance provides financial protection to NRIs and their families in the event of the insured's death. It offers a safety net by providing a lump sum payment or regular income, ensuring financial security for loved ones.

Key Features:
- Financial Protection: Ensures your loved ones are financially secure in case of your demise.
- Types of Plans: Term insurance, whole life insurance, endowment insurance, etc.
- Death Benefit: Sum assured is paid to beneficiaries upon death.
- Maturity Benefit: A lump sum is paid on policy maturity in some plans.
- Tax Benefits: Premiums qualify for tax deductions under Section 80C.
Mutual Funds

A mutual fund is an investment vehicle that gathers money from numerous investors and invests it in a diversified portfolio of assets like stocks, bonds, and other securities.

Key Features:
- Professional Management: Mutual funds are overseen by experienced fund managers who research, select, and manage the underlying investments within the fund. This eliminates the need for individual investors to manage their portfolios actively.
- Diversification: By investing in a mutual fund, you gain exposure to various assets, spreading your risk across different sectors and companies. This reduces the impact of any single investment performing poorly.
- Accessibility: Mutual funds offer a low minimum investment compared to buying individual stocks or bonds. This makes them a good option for investors starting out or those with limited capital.
- Liquidity: Most mutual funds offer high liquidity, meaning you can easily redeem your shares for cash, typically within a few business days.
- Variety of Investment Options: Various mutual funds are available, catering to different investment objectives and risk tolerances. You can choose funds focused on growth, income, specific sectors, or a combination.
Bank Fixed Deposit (FD)

A Bank Fixed Deposit (FD) is one of the best safe investment options in India, offering security and fixed returns over a specified period.

Key Features:
- Guaranteed Returns: Offers fixed interest rates, ensuring predictable returns to NRIs.
- Term Flexibility: Available in various durations, ranging from a few months to several years.
- Limited Liquidity: Money is locked in for the chosen term, affecting accessibility.
- Lower Returns: Compared to other options, FDs generally offer lower returns.
National Pension Scheme (NPS)

The National Pension Scheme (NPS) is a government-backed retirement savings scheme offering safe investments with high returns in India. An NRI is only allowed to invest in the Tier-I choice of the NPS. The NPS scheme for NRIs allows individuals aged 18 to 60 to invest in India's National Pension Scheme, provided they comply with KYC requirements.

It is ideal for NRIs looking to build a retirement corpus.

Key Features:
- Retirement Planning: Creates a retirement corpus through regular contributions.
- Tax Benefits: Contributions qualify for tax deductions under Section 80C and additional deductions under Section 80CCD(1B).
- Market-Linked Returns: Invests in a mix of equity and debt, offering potentially higher returns than FDs.
- Lock-in Period: Money remains locked until retirement, except for a partial withdrawal after 60 years of age.
- Professional Management: Funds are managed by professional fund managers.
Post Office Savings Scheme

Post Office Savings Schemes are among the safest ways to invest money in India. These government-backed schemes offer secure investments with attractive returns, making them one of the best investment options in India.

Key Features:
- High Safety: Government-backed schemes offer high security.
- Variety of Options: Includes savings accounts, time deposits, recurring deposits, etc.
- Easy Access: Widely available branches across the country.
- Competitive Interest Rates: Generally lower than bank FDs.
Recurring Deposit (RD)

A Recurring Deposit (RD) is a safe investment option in India, allowing individuals to regularly deposit a fixed amount over a predetermined period. It offers consistent returns on investment at the end of the deposit tenure.

Key Features:
- Interest: Earns compounded interest, generally offering higher rates than savings accounts.
- Tenure: Flexible options ranging from 1 year to 10 years or more.
- Investment: Minimum amount varies depending on the post office.
- Premature Withdrawal: Allowed with penalty charges.
- Tax Benefits: No tax benefits.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)

PMVVY is a government-backed pension scheme aimed at providing a monthly pension for 10 years after a lump sum investment. It offers guaranteed returns, making it one of the safest ways to invest money post-retirement.

Key Features:
- Interest: Currently 7.4% per annum, paid monthly.
- Eligibility: 60 years and above.
- Investment: Minimum Rs. 1.5 lakh, maximum Rs. 7.5 lakh.
- Tenure: 10 years.
- Premature Withdrawal: Not allowed.
- Tax Benefits: Interest income taxable.
Atal Pension Yojana (APY)

APY is a government-backed pension scheme in India that offers a safe investment option for individuals seeking a secure retirement future.

Key Features:
- Eligibility: Open to Indian citizens aged 18-40 with a savings bank account.
- Contribution: Regular monthly contributions ranging from Rs. 60 to Rs. 5000, depending on the desired pension amount.
- Government Matching: The government contributes Rs. 50/month for contributions of Rs. 60/month and Rs. 100/month for contributions of Rs. 120/month or more.
- Pension: Guaranteed monthly pension starting at age 60 years, ranging from Rs. 1000 to Rs. 5000 depending on contributions.
- Tax Benefits: Contributions qualify for tax deductions under Section 80CCD(1D) of the Income Tax Act.
Gold

Gold is widely considered the safest investment option in India due to its historical stability, liquidity, and ability to preserve wealth. It serves as a reliable hedge against economic uncertainties and offers diversification benefits.

Key Features:
- Investment Options: Physical gold (bars, coins), gold ETFs, digital gold, and gold savings schemes for NRIs.
- High Liquidity: Easily convertible to cash.
- Historical Value Appreciation: This has shown long-term value growth but is prone to price fluctuations.
- No Income: Does not generate regular income unless held in gold savings schemes.
- Safest Option: Considered a safe investment with high returns in India.
Savings Bonds

Savings Bonds are debt instruments issued by the government offering fixed interest rates for a specified period.

Key Features:
- Types: Sovereign Gold Bonds (SGBs), Floating Rate Savings Bonds, Senior Citizen Savings Scheme (SCSS), etc.
- High Security: Backed by the government, considered safe investments with high returns in India.
- Fixed Interest: Offers guaranteed returns over the investment period.
- Liquidity: Some bonds offer premature withdrawal options, while others are less liquid.
- Tax Benefits: Some bonds offer tax benefits on interest earned.

Comparison of Top Safe Investments in India with High Returns

Investment	Return Potential	Risk	Suitable for
Capital Guarantee Plan	Moderate-High	Low	All
ULIP	Moderate-High	Medium	All
Life Insurance	Moderate-High	Medium	All
Public Provident Fund (PPF)	High	Nil	Risk-averse investors
Mutual Funds	High	High	Risk-taker investors
Bank FDs	Medium	Nil	Risk-averse investors
NPS	High	Medium	All
Post Office Savings Schemes	Medium	Low	Risk-averse investors
Recurring Deposits	Low	Low	All
Pradhan Mantri Vaya Vandana Yojana	Low	Low	All
Atal Pension Yojana	Fixed	Low	All
Gold	Moderate-High	High	Risk-averse investors
Savings Bonds	Moderate-High	Low-Medium	Risk-averse investors

Wrapping it Up!

In this time of uncertainty, everyone wants to create a secure financial future. However, to do so, it is very important to have a proper understanding of your financial goals, risk appetite, investment tenure and liquidity needs. By considering these safe investments with high return options to invest in India, you can create a strong financial cushion in the long term.

FAQs

How can one choose the right investment option among safe investments with high returns in India?

Choosing the right investment option depends on factors such as financial goals, risk tolerance, investment horizon, and liquidity requirements. Consulting with a financial advisor and conducting thorough research can help in making informed investment decisions tailored to individual needs and circumstances.
How does inflation impact the real returns of safe investments in India?

Inflation erodes the purchasing power of money over time. While safe investments may offer stable returns, failing to outpace inflation could result in diminished real returns. It's essential for investors to consider the inflation-adjusted returns of their investments to ensure they maintain or increase their purchasing power over the investment horizon.
What are the benefits of making safe investments?

Choosing safe investment options not only helps you to secure your fund but it also provides an opportunity to create a financial cushion in the long term and gain a regular return on investment. Moreover, some of these investment options also provide the advantage of saving on taxes.

Past 10 Year annualised returns as on 01-12-2024

†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

^Tax benefit are for Investments made up to Rs.2.5 L/ yr and are subject to change as per tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
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**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).