Updated on 1 June 2023
In a world where uncertainty lurks around every corner, the pursuit of safe and profitable investment opportunities has become an irresistible exploration for both seasoned investors and cautious novices alike. The post-pandemic financial year 2023 beckons us with its enigmatic charm, leaving us to ponder: What are the best safe investment plans that will navigate us through these uncharted waters?
Key takeaways
- Investment planning is essential for sustaining financial health and demands an understanding of financial requirements and goals.
- Investors need to be aware of the tax implications of their long and short-term investment plans.
- Safe investments with high returns in India in 2023 include Guaranteed Savings Plans, Public Provident Funds, Senior Citizen Savings Schemes, and Fixed Deposits.
- Consult a financial advisor for personalized advice on investment plans that support your financial goals.
In this realm of endless possibilities, a careful examination of the investment landscape is vital to safeguard your hard-earned capital. Gone are the days of hasty decisions driven solely by profit potential, as the wisdom of a new era calls for a balanced approach that intertwines prudence, resilience, and adaptability. To enhance your knowledge of different types of best investment plans in India, read this blog further!
Investment Planning and its Need in Current Times
Investment planning is essential for sustaining your financial health. It is necessary to understand your financial requirements and goals and plan the moves accordingly. Good financial planning ensures that your investment is safe and you are not cutting heavily on your daily living expenses. Having said that, it is crucial to look for financial options that are the best mix of safety and returns. You must invest in at least one such financial plan which is highly secure and possesses no or low risk, and, at the same time, yields high returns on your investment.
Several modern and traditional options for safe investments with high returns in India exist. However, an investor needs to check all the aspects of investing money into savings plans. But first of all, let us understand the benefits and tax implications of investing.
What are the Benefits of Investment Plans?
From traditional investment vehicles to cutting-edge digital innovations, the benefits of investment plans in 2023 are poised to captivate and revolutionize the way you approach wealth creation. Take a closer look at the advantages of investment plans:
Enhanced Portfolio Diversification
Investment plans in 2023 enable individuals to diversify their portfolios with greater ease and efficiency. Traditionally, portfolios were limited to stocks, bonds, and real estate. But now sector funds, commodity-focused funds, and asset allocation funds have become great choices to invest in, which eventually helps in maximizing the returns.
Access to Innovative Technologies
The benefits of investment plans extend to accessing cutting-edge technologies. From robo-advisors leveraging artificial intelligence to algorithmic trading platforms, investors can harness the power of automation and data-driven insights to make more informed investment decisions.
Embracing Sustainable and Impactful Investing
Investment plans offer individuals the opportunity to align their financial goals with their values by embracing sustainable and impactful investing. The world is awakening to the urgent need for Environmental, Social, and Governance (ESG) considerations in investment strategies. With this increased focus on sustainability, ethical practices, and corporate responsibility, investors can channel their funds toward companies and projects that make a positive impact on the world.
Long-Term Financial Security and Freedom
Perhaps the most alluring benefit of investment plans is the potential for long-term financial security and freedom. By adopting a disciplined approach and leveraging the power of compounding, investments have the capacity to grow significantly over time.
Tax Implications for Investment Plan in India
Investments in India are subject to various tax implications. However, the specific tax treatment depends on the type of investment, holding period, and the applicable tax laws. Here are some common tax implications for investment plans:
Dividend Distribution Tax (DDT)
Previously, companies distributing dividends were required to pay DDT. However, effective April 1, 2020, DDT was abolished. Instead, dividends are now taxable in the hands of the recipient as per their income tax slab rates. If the dividends are up to ₹5,000 per financial year, they are exempted from tax. If this amount exceeds, the company deducts 10% tax under Section 194.
Securities Transaction Tax (STT)
STT is levied on the purchase or sale of securities, including stocks and equity-oriented mutual funds, at the time of the transaction. The rates vary depending on the type of security. For example, the STT rate for equity delivery-based transactions is 0.1% on the sell side.
Tax on Interest Income
Interest income earned from investments, such as fixed deposits, bonds, and certain types of mutual funds, is taxable as per the individual’s income tax slab rates.
Tax Deducted at Source (TDS)
Certain investments may attract TDS, where tax is deducted by the payer at the time of making payment. For example, TDS may apply to interest income from fixed deposits, rental income, or commission received from mutual funds. The rates and thresholds for TDS vary based on the specific type of income.
It’s important to note that tax laws and rates may change over time, so it’s advisable to consult a tax professional or refer to the latest tax regulations from the Income Tax Department of India for accurate and up-to-date information regarding tax implications for your investment plan.
5 Safe Investments with High Returns In India 2023
n the dynamic world of investments, where risks and uncertainties often lurk, finding safe avenues that offer high returns is worth prioritizing for your financial front. However, it must be noted that, recently, people have been opting for more risk-free options due to the uncertainty in different sectors. However, safer market options like bonds, debts, and securities are still excellent picks for many investors.
Let’s have a look at the 5 Safe investments with high returns in India in 2023:
1. Guaranteed Savings Plan
It is one of those plans that offer better, safe, and guaranteed returns, as the name suggests, in 2023. A guaranteed savings plan is a savings and protection-oriented plan that offers benefits to the policyholder both on maturity and on death. The best part about this plan is the return you get on your investment and bonuses, and you can also add riders to the plan to enhance your plan’s protection cover further.
2. Public Provident Fund (PPF)
Government-backed schemes have served as the safest investment option for a very long time. Public Provident Fund (PPF) is one of the most reliable ones. It is a long-term savings scheme with a lock-in period of 15 years. However, PPF yields a high return on investment compared to other options. It is a great way of building a retirement corpus for yourself while saving taxes. Since PPF offers a very high-interest rate while offering tax exemption on the corpus build and the returns gained, it is considered one of the safest investments with high returns in India.
Additionally, you can extend the investment tenure for as many as five years. The best part about PPF is that you can start investing in it from as low as ₹500 to up to ₹1.5 lakhs in one financial year.
3. Senior Citizen Savings Scheme (SCSS)
SCSS (Senior Citizens Savings Scheme) is a post office savings scheme for senior citizens that provides investors with security and a predictable income. It is also a tax-saving strategy that is ideal for retirees seeking a low-risk investment. Under this scheme, section 80C of the Income Tax Act allows for a tax deduction for assets.
SCSS proves to be among the safe investments with high returns in India as it is backed by the Government and hence falls under the category of low-risk investment options.
4. Fixed Deposits (Bank FDs)
Fixed deposits are the most common form of a savings plan and the simplest method of safe investments with high returns in India. A bank FD offers good interest rate than a regular savings account. However, the decreasing rate of interest is still a concern for many. It is recommended that if you are looking for a short-term investment with good liquidity, you can consider FDs. However, going for a Guaranteed Savings Plan would be a good move since they offer tax benefits, long-term investment, and excellent returns.
5. National Pension Scheme (NPS)
A great government-backed investment option is the best for individuals looking to invest money to secure their future after retirement. The national pension scheme provides a great interest rate of 8% to 10%. The minimum sum you can contribute to this fund is ₹6000 in a year, i.e., roughly ₹500 per month. Any Indian citizen who is 18 years to 60 years old can open an NPS account. The policy matures when the policyholder attains an age of 60 and can be extended to 70 years. It also offers tax savings options. Thus it is a great long-term savings plan for many individuals.
Comparing Savings Plans Based on Returns and Risk Levels
In India, there are various savings plans available that offer different returns and risk levels. Here’s a comparison of some popular savings plans based on returns and risk:
Types of Saving Plans
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Return Level
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Risk Level
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Guaranteed Savings Plan
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All Guaranteed Savings Plans offer a certain level of guaranteed returns. These returns are predetermined and typically lower than those associated with higher-risk investments.
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These plans are generally considered low-risk investments and provide stability and protection of the principal amount invested. These are suitable for conservative investors who prioritize capital preservation and are averse to significant market fluctuations.
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Public Provident Fund (PPF)
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PPF offers attractive returns and is backed by the Government of India. The interest rate is announced quarterly and is currently 7.1%.
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PPF is considered a low-risk investment as it is a government-backed scheme. However, the returns are subject to market fluctuations.
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Senior Citizen Savings Scheme (SCSS)
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SCSS provides relatively higher returns compared to other government-backed savings schemes like the Post Office Monthly Income Scheme (POMIS) or the National Savings Certificate (NSC).
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While the SCSS offers a fixed interest rate, it is subject to change with revisions made by the government. If interest rates fall, new deposits will earn a lower interest rate, but existing investments will continue to earn the rate at which they were made.
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Fixed Deposits (Bank FDs)
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Fixed deposits offer a predetermined interest rate that is generally higher than regular savings accounts.
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FDs are susceptible to interest rate risk. If interest rates rise after you’ve locked in your deposit, you may miss out on potentially higher rates in the market. Conversely, if interest rates fall, your fixed deposit will continue earning the agreed-upon lower rate.
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National Pension Scheme (NPS)
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The NPS offers different investment options, such as Asset Class E (Equity), Asset Class C (Corporate Bonds), Asset Class G (Government Bonds), and the Active Choice option. The returns on these options vary based on market conditions and the performance of the underlying assets.
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Since a portion of the NPS investments is allocated to equities, there is an inherent market risk. The equity component is subject to market fluctuations and can result in both gains and losses. Individuals with a higher risk appetite may opt for a higher allocation to equities for potential long-term growth, but it also increases the risk level.
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Wrapping it Up
It is essential to consider your financial goals, time horizon, and risk tolerance when choosing an investment plan. Diversification and a balanced approach to savings and investments are often recommended to manage risk and potentially maximize returns. Consulting with a financial advisor can also provide personalized guidance based on your specific circumstances.
So if you want to invest your hard-earned money in safe schemes, then the plans mentioned above are your best bets. Experts suggest that you must keep a vivid portfolio where you have all short-term, mid-term, and long-term policies. Modern investment options like ULIPs and Guaranteed Savings Plans are some of the policies that low-risk investors must indeed explore before finalizing a savings plan for their financial goal.
FAQs
1
What are the benefits of making a safe investment?
Here are a few benefits of safe investments:
- Potential for long-term wealth accumulation and financial growth.
- Diversification of investment portfolio to mitigate risk.
- Opportunity to earn passive income through dividends or interest.
- Capital appreciation over time as investments increase in value.
- Tax advantages, such as tax-deferred growth or deductions.
2
Why you must make a safe investment?
- Safe investments provide stability and help preserve your wealth over time.
- They protect your principal and minimize the risk of losing your money.
- They offer peace of mind and reduce financial stress by avoiding unnecessary risks.
3
Which investment option is better than FD?
There are several investment options that can potentially provide better returns than Fixed Deposits (FDs). Some popular alternatives include:
- Guaranteed savings plan
- Mutual Funds
- Stocks
- Real Estate
- Bonds
- Index Funds
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It’s important to note that each investment option has its own risks and returns, and it’s advisable to consult with a financial advisor to determine the most suitable option based on your individual financial goals and risk tolerance.
4
Which investment gives a high return?
There are various investment options that provide high returns:
- Guaranteed Savings Plan
- Public Provident Fund
- Senior Citizen Savings Scheme
- Bank FDs
- National Pension Scheme
5
What are the safest tax-saving investment options available in India?
The safest tax-saving investment options in India include:
- Guaranteed Savings Plan
- Public Provident Fund (PPF)
- National Savings Certificate (NSC)
- Tax-saving Fixed Deposits (FD)
- Employee Provident Fund (EPF)
- National Pension Scheme (NPS)
These options offer tax benefits under various sections of the Income Tax Act and are considered relatively safe investments.
