If you are new to finance and have only recently decided to foray into the investment lane, we empathise with you! We understand how confusing this aspect of adulthood can get, with all the complex terminologies and hundreds of investment options. Moreover, when you throw the word ‘risk’ into the mix, choosing an investment path becomes much more perplexing.
It’s unfortunate how many people hesitate to take that first decisive step to invest, given the complexities of risks and returns. However, we are here to paint a clearer picture once and for all for a newbie investor.
In this blog, we’ll take you through the safest investment options in the Indian financial market such as the best corporate fds to help you quickly and smoothly begin your wealth-building journey. These options come with zero-to-low risks and give moderately high returns to effectively boost your wealth creation efforts.
1. Public Provident Fund (PPF):
This government-backed investment scheme is probably your best and safest investment option to simply lock in your money on an annual basis for a minimum of 15 years. Not only does any amount standing in the PPF Account not be liable to any attachment in respect of any debt incurred by the account holder, but its interest and returns are exempted from tax. PPF is a great way to plan for your retirement. Being a government scheme, it comes with no risk.
2. Debt Mutual Funds:
These mutual funds invest in fixed-income instruments that offer capital appreciation such as government bonds, corporate bonds and debt securities, treasury bills, commercial papers, etc. The level of risk is substantially low since these mutual funds exclusively invest in instruments earning a fixed income. They also give better returns compared to Fixed Deposits. There is no tax leakage in this investment as the tax incidence is only on withdrawal. You can also take the SIP route to invest in debt mutual funds.
3. Capital Guarantee Plan (ULIP):
This ULIP option is a great way to earn returns while still having one foot in the equity market without the risk of loss that comes with it. In the case of losses, under this plan, the fund company absorbs the loss and protects your capital. A capital guarantee plan invests over half of your principal amount in debt and capital protection, saving the remainder for the equity market. It has a tenure of 10 years, wherein you can pay the premium up to a maximum of 5 years. Upon maturity, you will get your premium amount and any market-linked returns.
4. Fixed Deposit (Corporate FD):
While Bank FDs are an age-old instrument for generations of Indians to save their money, you can explore taking the lesser-known route of corporate FDs. These FDs are term deposits offered by NBFCs for a fixed duration of time at a fixed rate of interest. You can invest in corporate FDs that have a higher credit-rating.
5. National Pension Scheme (NPS):
This government scheme has recently gained popularity among young investors, particularly since it has been opened to the general public of India. It is a retirement scheme that matures at 60 years of age. Anybody over the age of 18 can contribute towards this scheme annually to not only earn high returns but also save taxes. The scheme invests your capital in market-linked securities such as equity and debt. Feeling more confident to finally put in your savings somewhere? Connect with us at www.tailwindfin.com, the best investment platform for beginners and let our wealth management experts guide you on your journey towards financial independence.
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