Investment option that guarantee safe returns!

While selecting an investment avenue, you have to match your own risk profile with the risks associated with the product before investing. In reality, risk and returns are inversely related i.e., higher the returns, higher is the risk, and vice versa.

Most investors want to make investments in such a way that they want high returns as fast as possible without the risk of losing the principal money they have invested. This is the reason why many investors are always on the lookout for top investment plans where
they can double their money in a few months or years with little or no risk. However, it is a fact that investment products that give high returns with low risk do not exist.

There are two types of investment – financial and non-financial assets. Financial assets can be divided into market-linked products like stocks and mutual funds and fixed income products. Non-financial assets like gold and real estate.

here are few investment options that can give you safe returns!

1. Debt mutual funds

Debt funds are ideal for investors who want steady returns. These funds are less risky than equity funds. Debt mutual funds primarily invest in fixed-interest generating securities like corporate bonds, government securities, treasury bills, commercial paper, and other money market instruments. Currently, the 1-, 3-, 5-year market return is around 6.5 percent, 8 percent, and 7.5 percent, respectively.

2. Bank fixed deposit (FD)

A bank fixed deposit (FD) is a safe choice for investing in India. Under the deposit insurance and credit guarantee corporation (DICGC) rules, each depositor in a bank is insured up to a maximum of Rs 1 lakh for both principal and interest amount. As per the need, one may opt for monthly, quarterly, half-yearly, yearly or cumulative interest option in them. The interest rate is added to your income and is taxed as per your income slab.

3. Real Estate

The house that you live in is for self-consumption and should never be as an investment. If you do not intend to live in it, the second property you buy can be your investment. The location of the property is the single most important factor that will determine the value of your property and also the rental that it can earn. Investments in real estate deliver returns in two ways –
capital appreciation and rentals. However, unlike other asset classes, real estate is highly illiquid. The other big risk is with getting the necessary regulatory approvals, which has largely been addressed after coming of the real estate regulator.

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be Greedy
when others are fearful” – Warren Buffett

Investing your money that guarantees safe returns can increase your productivity helps you to achieve financial independence and can foster your early retirement.
If you need more tips on financial independence and early retirement or investing in real estate, call Raj now, at 720 5151051 for professional assistance.

Photo by William Iven on Unsplash

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