7 Best Low-Risk Investment Options in India

It is important that you understand the difference between saving and investing money. Saving money is a good habit that should be inculcated from an early stage. On the other hand, investing money not only lets you keep a chunk of money aside but also helps you gain returns from it. However, investing money is not easy and you need to look out for options that will not pinch your monthly budget but will also give you sizeable returns. New and experienced investors should understand their financial goals and make investments accordingly. Another factor investors should take into consideration is their risk tolerance.

There are several investment options for investors in India that have low, medium, and high risk. However, investors have several questions when they are planning to invest such as how much to invest, where to invest, duration of investment and so on. Investors should also focus on having a diversified investment portfolio. This essentially means, you need to invest your money across different types of investments. With a diversified investment portfolio, you mitigate the risk of losing all your hard-earned money and also ensure that you are not relying on only one source for generating returns.

Let’s check out some of the top low-risk investment options that will give your high-returns:

  1. Fixed Deposits

Fixed deposits with banks are one of the most popular and safest investment options in India. Each bank offers a different interest rate on fixed deposits. Currently, some of the popular banks in India offer interest rates on fixed deposits up to 7.5%. You can select a fixed deposit that is suitable for you. It can be for yearly, quarterly or monthly. The interest earned on the fixed deposit is added to your income and is taxable depending on your income slab. A fixed deposit can help you in case of an emergency as it allows premature withdrawal. However, the interest is deducted but after breaking the fixed deposit, the investment becomes liquid and can be used immediately. Another benefit of fixed deposits is that as per the Deposit Insurance and Credit Guarantee Corporation rules, depositors are insured up to Rs.1 lakh for both – principal and interest.

  1. Public Provident Fund (PPF)

Public Provident Fund has always been a most common form of investments especially among salaried individuals as they are highly secure and offer guaranteed returns. The reason PPF has been favourable for individuals is that it offers tax benefits under Section 80C of the Income Tax Act. The lock-in period is 15 years although, subscribers can opt for early withdrawal starting from the 7th year. The interest rate on PPF is set by the government every quarter based on the yield (return) of government securities. You can open a PPF account in any nationalised or private banks or the nearest post office. Investors who are looking for a low investment can opt for PPF investments as it is bound to give you sizeable returns.

  1. Gold

Gold is considered one of the safest and secure forms of investments for decades especially in India. Possessing gold and gold jewellery has been one of the oldest ways of investment that leads to the multiplication of wealth. However, it must be noted that instead of investing in gold jewellery, you should invest in gold bars or coins as you have to pay a good amount for making charges of the jewellery. You can also consider Exchange-Traded Funds (ETFs) gold deposit schemes, gold mutual funds, and Sovereign Gold Bonds. In the long-run, gold tends to deliver good returns.

  1. Stocks

New investors generally tend to stay away from stocks as this form of investment has a certain amount of risk and uncertainty attached to it. However, if you are young and can take risks, stock investment has a great potential and has proven to yield positive returns in the long run. With equity investments, you can invest a small amount of money in several small, mid and large-cap stocks. You can follow sites like, which provide an overview of a company’s stock. You may also opt for intra-day trading, that is, buying and selling securities on the same day, but that requires a great deal of skill and technical analysis.

  1. Mutual Funds

At present, mutual funds are considered one of the most dynamic form of investments in India. Stock market investment can be intimidating especially for new investors. In such cases, investors can consider mutual funds as it includes different portfolios, friendlier norms in case of the tax, and others. Mutual funds are managed by fund managers and the returns generated depend greatly on their abilities to manage the funds. You can also go for monthly income plans (MIP) that are also known as debt-oriented mutual funds. Mutual funds also encompass the Equity Linked Savings Scheme (ELSS) which are eligible for deduction under the Section 80C of the Income Tax Act and the lock-in period is 3 years. The investment amount in mutual funds depends on an investor’s age and financial goals.

  1. Real Estate

The real estate sector has seen quite a positive change in prices since over past couple of years. However, in order to own a property, you need a huge chunk of capital and hence, you should consider this investment option only if you have surplus funds. In the case of real estate, there are two ways to earn money – rent and appreciation of the property. The introduction of the Real Estate Regulation and Development Act (RERA) has immensely improved the regulations in the real estate space.

  1. National Pension Scheme (NPS)

As it is a government-backed scheme, the National Pension System (NPS) is a safer investment option. It is a long-term retirement investment which is managed by the Pension Fund Regulatory and Development Authority (PFRDA). The main aim of the scheme is to provide financial security for your post-retirement life. You can garner tax benefits as well as moderate returns while investing in the NPS.

All the above options are ideal for investors who are looking for low-risk investments that will offer good as well as guaranteed returns. You must make financial planning a top priority and be ready for a sound future. Investing money requires you to do some decent research and make smart decisions which will eventually lead to the creation of wealth.

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