5 Safe Investment Options for Conservative Investors in India

Who doesn’t like steady growth of wealth and almost certain return on investments? However, investing in such saving plans is also necessary, even for the aggressive investors looking to growth in equity markets. If you have been looking for safe investments, you can have more than one advantage to your side with them. For instance, safe investments can help you with the following:

• Safeguard the returns from riskier investments.
• Preserve the accumulated wealth against inflation and taxes.
• Help in tax-savings under section 80C.
• Help achieve extremely important goals with confidence.

All of the investments we have included here will provide you tax benefits along with steady returns. Here are five long-term safe investment plans for you to consider for the steady growth of your wealth:

1. Guaranteed Savings Plans from Life-Insurers

Life insurance companies have always been the torchbearer of long-term safe investments. Guaranteed saving plans are one step ahead of any other long-term fixed return investments. Few of the major benefits these plans will offer you are:

• Tax-saving on investment and tax-free maturity
  
• Maturity value inclusive of guaranteed the sum assured + guaranteed yearly bonuses + guaranteed loyalty additions (for long-term investment commitment).
  
• Goal protection option, where the plan pays all the due future premiums in case of the death of the policyholder, so that your family can still meet the goal.
  
• Limited premium payment option, so that you invest for shorter-term while the money continues to grow for a longer-term.

Coming from life insurers the plan would be incomplete without the life cover benefit, which is inbuilt in the plan.

Also Read - Best Fixed Income Investment Options.

2. National Saving Certificate (NSC) VIII-Issue

NSC has been popular investment option in India since inception. The fact that you don’t have to pay any tax till maturity, adds to that value. NSC VIII issue provides you with tax savings of up to Rs. 1.5 lakhs under section 80C. Other benefits of NSCs are as follows:

• Safe investment of five years with guaranteed return.
  
• Tax-saving on investment and deferred tax-payments until maturity, (no TDS).
  
• No maximum limit of investment.
  
• Certificates can be used as collateral for loans.

You can build a regular income by investing Rs. 1.5 lakhs every year in NSCs for five years. Afterwards, you only need to reinvest the principle while using the interest as your income.

3. Unit Linked Insurance Plans (ULIPs)

Yes, you can also use Unit Linked Insurance Plans to park your funds for safe and steady growth, which can also be completely tax-free. ULIP plans have multiple unique features which will help you not only invest in safe options for long-term but also provide superior safety to your family.

4. New Pension Scheme (NPS)

New pension scheme or national pension scheme has been another amazing investment option for safe investors. The scheme offers professional fund management with market-linked returns on fixed-income investments.

Although, the NPS Tier-I account is more popular due to its tax-exempt status, you can enjoy the same investment returns on Tier-II account as well. The investment had been introduced mainly for retirement savings and even offers an active portfolio management for retirement accounts investing in equity funds.

If you invest in NPS for your retirement (Tier-I account), you can enjoy an annual deduction of Rs. 2 lakhs under sections 80C and 80CCD(1B). However, the maximum deduction will be limited by 10% of your annual income (Basic + DA).

5. Public Provident Fund (PPF)

PPF has been the first retirement saving solution for the workers of the unorganised sector. PPF investment is completely tax-exempt. The investments up to Rs. 1.5 lakhs per annum and maturity value too. PPF also allows partial withdrawals after five years of investment.

Only drawback PPF has is that your annual investments are limited to Rs. 1.5 lakhs. So, even when your income has been growing and you want to invest more in PPF you cannot. However, the returns on PPF are guaranteed by the government of India, So, it is unbeatable when it comes to investment risk.

Must Read - NPV Meaning.

Diversification is the Best Strategy

Hope this list gives you an idea and helps you select the most suitable investment for your goals. However, it is always best to have a few long-term investments and not put all your money into one option. Even PPF interest rates keep changing due to market conditions.