October 9, 2023
When it comes to investing in India, fixed-income investments have long been a favoured choice among investors seeking stability and regular income. These investments provide a predictable stream of returns and are considered safer than equities, making them an integral part of a well-balanced investment portfolio.
In this blog, we’ll explore some of the best fixed income investments options available in India for beginners and seasoned investors alike.
1. Fixed Deposits (FDs):
Fixed deposits are one of the most popular fixed-income investments in India. They are offered by banks and non-banking financial companies (NBFCs) and provide a fixed interest rate over a specified tenure. Bank FDs offer capital protection upto 5 Lacs and can be customized to suit your investment horizon. Senior citizens often receive higher interest rates on the Bank FDs and best corporate FDs.
2. Government Bonds:
Government bonds, such as Sovereign Gold Bonds, National Savings Certificates (NSC), and Public Provident Funds (PPF), are considered highly secure investment options. They are backed by the Indian government and offer competitive interest rates. PPF, for instance, also offers tax benefits under Section 80C of the Income Tax Act.
3. Corporate Bonds:
Corporate bonds are issued by companies to raise capital. These bonds provide regular interest payments and return the principal amount at maturity. Investors can choose from various best corporate bonds in India based on their risk tolerance and investment horizon.
4. Post Office Monthly Income Scheme (POMIS):
POMIS is a government-backed investment option available through post offices. It offers a fixed interest rate and monthly income, making it a suitable choice for those looking for the best investment plan for monthly income.
5. Fixed Maturity Plans (FMPs):
FMPs are close-ended debt mutual funds with a predefined maturity date. They invest in a portfolio of fixed-income securities. FMPs can offer relatively stable returns but they come with a lockin period.
6. Debt Mutual Funds:
Debt mutual funds invest in a diversified portfolio of fixed-income securities like government bonds, corporate bonds, and money market instruments. They offer professional management and liquidity, making them suitable for investors seeking diversification and flexibility.
When considering fixed-income investments, it’s crucial to assess your financial goals, risk tolerance, and investment horizon. Diversifying your fixed-income portfolio can also help mitigate risk. Additionally, keep an eye on prevailing interest rates, as they can impact the returns on your fixed-income investments. For more such advisories, download the Tailwind app and start interacting with our expert wealth managers today!
