Best Investment Options for Fixed Returns

The financial needs and priorities of every individual are different. Also, the risk taking ability of every individual differs. Some individuals might have a higher risk appetite, while some may not be willing to take any risk at all. For individuals who have a low risk appetite, fixed return products suit them the best.

Here are some of the smart investment options for fixed returns:

Fixed Deposits

Fixed deposits are offered by banks at attractive interest rates. FDs are offered to investors for a period as low as 7 days up to 20 years. Fixed deposits offer higher returns than a savings bank account. At present, FDs are giving a return of 6-6.75%. The returns vary from one bank to another.

Bonds

Bonds are loans which an individual makes to the government and large organisations. The government and companies issue bonds in order to raise money. The principal amount along with the interest is given back to the investor at a future date as per the agreement between the two parties. A lot of people are under the wrong impression that one cannot sell bonds until maturity. However, one can buy and sell bonds in the open market. At present, bonds are giving an interest rate of 7-7.5%.

Public Provident Fund

Public Provident Fund (PPF) is a type of investment which is provided by the Government of India. PPF comes with a lock-in period of 15 years. The rate of return provided on PPF changes as per government policies. At present, PPF is providing a return of 8.1%. Amount invested in PPF is also eligible for a tax deduction under section 80C of the Income Tax Act.

National Savings Certificate

NSC are bonds issued by the government for small savings and one can purchase these bonds from post offices. The interest rate on NSC is decided by the government every year. It is linked to the yield of 10-year government bonds. The current interest rate is 8%. The lock-in period for NSC is 5 years.