Five investment schemes with low risk and high return

Investments, where the element of risk is almost zero, can be called as safe investments. Stocks, mutual funds, insurance, and many more private savings schemes are available in the market, but there are a few schemes which ensure safety for investors.

These are five good bets for people who would not like to take risks.

1. Sukanya Samriddhi Account

Sukanya Samriddhi Yojana was launched by the government to encourage education of girl children. Sukanya Samriddhi Account can be opened at post offices and commercial banks. The investment made under this account is eligible for tax benefits under section 80C of the Income Tax Act. Sukanya Samriddhi Account has a very long-term holding tenure.

2. Post Office Time Deposit Account

Post Office Time Deposit Account is a good option for investors looking at building a corpus for both short and long-term. The investor can deposit money for a term and he or she will receive money with interest earned at the end of the term. The account can be opened for a minimum of 1 year and the maximum tenure is 5 years. Premature closure of account can be also availed. For 1 year, the investor will get 6.60 percent interest (compounded quarterly).

3. National Savings Certificate

People who are looking for a safe investment avenue can open a National Savings Certificate (NSC) by investing Rs 100 (or multiples of 100) as an initial investment and increase the amount when feasible. The government revises this rate every quarter. Investors can purchase NSC after furnishing the know your customer (KYC) documents. NSC only has cumulative interest payout option, and investments qualify for tax rebate under section 80C.

4. Sovereign Gold Bond

Investment in the yellow metal is deemed as a safe haven during financial uncertainties. Sovereign Gold Bond (SGB) is an alternative to holding physical gold. It is backed by the government and investors will be paid interest on the amount of initial investment at the rate notified by RBI. Apart from the interest, the SGB investors will be eligible for a 2.50 percent per annum payable semi-annually on the nominal value. Minimum investment in the bonds is one gram and the maximum limit of subscription is 500 grams per person per fiscal year (April-March).

5. National Pension Scheme

National Pension Scheme (NPS) is a retirement investment scheme managed by Pension Fund Regulatory and Development Authority (PFRDA). NPS investors can avail tax benefits under section 80CCD of the Income Tax Act. There are two types of accounts under NPS — Tier I and Tier II. In Tier I, the contribution made cannot be withdrawn and in Tier II, the contribution can be withdrawn anytime.