Let us know about some low risk investments you can be a part of to save some money for the future.
1. Monthly Income Scheme
It is risk-free and helps in getting decent returns. With this scheme, the income is taxable. Hence the returns are lower than other schemes but it does not attract any TDS. The interest rate of the Post Office Monthly Income plan is 7.3 percent, which is quite good. This is one of the safest options as it is backed by the government of India.
2. Public Provident Fund
It is also known as PPF and it is one of the favorite investments made by individuals who are working on a salary. Out of its many advantages, the most important one is that it saves tax. Secondly, it provides tax benefits under Section 80C of the Income Tax Act. In short, it helps you save for retirement.
This fund, however, has a few limitations. There is a lock-in period to the amount submitted, which means you do not have the liberty to withdraw the money anytime. You will have to let it be for at least six years. In case of premature withdrawal, you can lose more than half of the amount. Another issue is that the government changes the interest rate quarterly.
3. Small Finance Bank
It is safe and offers a good interest rate. It is said to offer an interest rate of more than about 8.5 percent on its one year to 2 years deposit. If you opt for a 24 to 36 months deposit, you can get a decent interest rate on low-risk investment
4. Fixed Deposits
The fixed deposits that are backed by the government, are the investments that allow you to earn up to 9 percent interest throughout 1, 2 and 3 years. For a short-term and low-risk investment, this is one of the best options.