Investments are a necessary part of an individual’s financial plans. We invest our savings from our earnings either as a security for unexpected crises or as a medium to generate capital for specific goals. An investment plan is selected on the basis of an individual’s age, risk tolerance, and the purpose of the investment. If you are looking for a risk-free investment that will generate high returns, here is a list of five of the best avenues you can consider investing in.
Fixed Deposits
The option of investing in a fixed deposit is the safest, since it does not involve any risks. In addition to that, fixed deposits also generate higher returns with fixed interest rates. The rate of interest offered varies from bank to bank ranging from 4% to 7.50%. A few NFBCs like Bajaj Finance provide FD interest rates as high as 8.20%.
Equity Mutual Funds
Even though mutual fund investments have market risks associated with them, an equity mutual funds investment involves minimum risk. Along with that, long-term investments can also become tax-free. If the holding of your funds goes beyond 12 months, you enjoy tax-free returns. Additionally, the investment in mutual funds does not require high amounts of investment; you can even initiate the investment at just Rs 500.
Investing in equity mutual funds has several other advantages like diversifying your risks by investing in more plans with smaller investments. Investment in funds through NFBCs gives you an added advantage of professional guidance and fund management. The option of flexible liquidation of funds at any time can help you avoid estimated market risks.
Real Estate
Real estate is a great investment option for wealth building without involving market risks. If you have a higher amount to invest for a longer term, real estate is a low-risk investment opportunity. As the volatility of the market does not affect real estate investments, it brings higher returns.
Being a tangible asset, the value of real estate can never go down to zero and the home owner’s insurance protects your investment. You can also get tax deductions on mortgage interest property taxes as well as depreciation on this investment. Moreover, the greatest benefit of investing in real estate is that it diversifies your portfolio which mitigates the risk of investments. However, it is an asset that cannot be liquidated easily, which makes it difficult to access your money instantly.
Life and Health Insurance
Talk about a safe and smart investment and investing in insurance is the perfect option. By investing in insurance, you lend your money into safe hands along with providing coverage for your family. In addition to that, you can also attain a loan against your insurance coverage.
Retirement Planning and Pension Plans
When planning for a minimum-risk high-return investment, one can also opt for setting up a retirement plan, senior citizen fixed deposit plan, pension plans or senior citizen saving plans. These investments generate periodic returns to serve as regular income. Thus, by investing in a retirement plan you can enjoy high returns periodically without even having to worry about the market risks.
Considering that you have a clear idea about the high-return low-risk investment options now, it is imperative that you analyse all these options before choosing your investment vehicle.
