Six Low Risk/Guaranteed Investment Return

Generating returns is never an easy task; nevertheless there are some schemes which provides guaranteed investment return at a very low risk or no risk. Appended below are some of the schemes which gives you good return at bare minimum risk.

Fixed Deposits (FD)

One of the most renowned guaranteed Investment scheme is Fixed Deposits (FD). Anyone can open an FD with any bank or any company allowed accepting deposits.

Interest rate on fixed deposits ranges from 9.00% to 10.00% depending upon the amount of your deposits. Senior citizens get extra interest rate benefit of 0.5% to 1.00%. RBI is responsible for fixing and monitoring the rate of interest on Fixed Deposits.

Tax implication: Interest earned up to a limit of Rs.10,000 per annum is tax free and anything earned above the limit of Rs.10,000 is taxable at a flat rate of 10.00%. Bank will deduct TDS on the same excess amount.

Why to open a FD

It is always advisable to allocate some portion of your income to an investment, where there is no risk of losing out the money and gives you some guaranteed return.

For senior citizen opening of an FD is one of the best investment opportunities as they get some additional interest benefit over and above the prevailing interest rate. Also, since it’s a short term investment ranging from 1-3 years, you can get the return in your hand in a very short span of time and can utilise the same.

One thing to notice here is, if you are going for corporate deposits; make sure you don’t get misguided by the rate of interest provided. Corporate deposits carriers high rate of interest vis a vis high risk. It is always advisable to go for bank fixed deposits.

Recurring Deposits (RD)

Unlike Fixed Deposits were the investment is big, Recurring Deposits gives you an option to deposit an amount which is as low as Rs.10 on the monthly basis. Recurring deposits are very much successful for the salaried class, as income earned by them gives less option to deposit huge amount at a time, rather gives option to deposit small small amount on a recurring/regular basis.

One can open a RD account with any bank or Post office in India, and after a specific period the bank returns you the principal + interest. Here also, the investment period ranges from 1-3 years.

Tax implication: Unlike the case of Fixed Deposits, banks do not deduct TDS while giving credit of  your interest but the same amount is added to your total income and based on tax bracket you fall,  tax is paid.

Monthly Income Scheme (MIS)

Monthly Income Scheme (MIS) also falls under the category of no risk and guaranteed return. One can open a MIS with any post office in India and can avail the facilities there after.

MIS provides you a guaranteed return at an interest rate of 8.40% payable monthly. All you got to do is invest an initial amount ranging from Rs.15,00 to Rs.4,50,000 in case of single account and from Rs.15,00 to Rs.9,00,000 in case of joint account and start earning interest on the same on monthly basis.

It is suitable for retired employees or senior citizen, for whom a regular income is very much helpful.

The account can be opened for a period ranging from 1-5 years and at maturity you get all the money invested.

Senior citizen Investment scheme (SCSS)

As the name suggest, SCSS is only applicable for senior citizen. Below are the criteria of SCSS account.

1. The account can be open by an individual who has attained 60 years or who has retired under     voluntary retirement scheme (VRS), can join at 55.

2. Non-resident Indian (NRIs) or Hindu undivided family (HUF) are not eligible to open account.

3. There is maximum of Rs.15 lacs per individual can be invested.

4. Rate of interest 9.2% per annum from the date of deposit on quarterly basis.

5. Investments are eligible for tax deduction under section 80C.

6. The minimum investment period is 5 years.

7. The account can be foreclosed after 1 year with 1.5% deduction & after 2 years deduction is 1%.

Monthly income scheme (MIS) & Senior citizen saving scheme (SCSS) are the best for senior citizens who desire monthly or quarterly regular income.

Public Provident Fund (PPF)

A PPF Account can be opened in a Head Post Office or in a branch of SBI or its subsidiaries or at specified branches of some other nationalised banks by an individual on his own behalf or on behalf of a minor of whom he is a guardian or on behalf of a Hindu Undivided Family of which he is a member. -  for more details visit my earlier article at Public Provident Fund Scheme (PPF)

National Savings Certificate (NSC)

NSC also a popular instrument for salaried class, government employee who are under Income tax assesses.

The details of NSC are as stated below..

    

The minimum investment amount is Rs.100/-

    Investments are eligible for tax deduction under section 80C.

    The tenure is 5 & 10 years, rate of interest for 5 years is 8.5% & for 10 years 8.8%.

    There is no TDS but the interest income is taxable.

Happy Assured Returns!!