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Low-risk, high-return investments like PPF and gold offer salaried employees steady growth and peace of mind.
Time is an important factor in multiplication.
For salaried employees, building long-term wealth is key to a financially secure future. They can choose from a range of investment tools to build their retirement corpus based on risk appetite and target.
While some investments are high-risk, there are also low-risk investment options that offer higher returns than fixed deposits and give you peace of mind. Products like public provident funds, gold, etc come with steady and higher returns than FDs. Moreover, they are lower risk than investments like equations which are very volatile.
In any case, starting investments as early as possible is one of the best gifts one can give themselves. Time is an important factor in multiplication and ensures that you benefit from the power of compounding.
With this in mind, here are some low-risk investment options that salaried employees can benefit from:
PPF (Public Provident Fund): PPF is a long-term, government-backed savings scheme with a 15-year lock-in. In PPF, not just contributions but interest earned and maturity corpus are also tax-free. Currently, the government offers 7.1 per cent returns in this scheme, which is reviewed periodically.
PF (Provident Fund): Employees’ Provident Fund (EPF) is a retirement benefit scheme for salaried individuals. It earns tax-free interest and is managed by EPFO, currently offering 8.25 per cent p.a. A portion of an employee’s monthly salary is contributed by the employee and a similar amount is matched by the employer towards PF.
Gold: Gold is a traditional, trusted investment in India. It is considered a hedge against inflation and currency fluctuations. Traditionally, god has offered 10 per cent annual returns and adds stability and diversification to an investment portfolio.
Arbitrage Mutual Funds: Arbitrage funds profit from price differences in equity and derivatives markets. One of the lowest risk mutual funds, these are ideal for conservative investors seeking short-to medium-term parking of funds. Many arbitrage funds have offered at least 8 per cent returns in the last year.
RBI savings bonds: These bonds have been introduced by the government, open to Indian residents, HUFs, charitable institutions, and universities. These bonds are available through designated bank branches and Stock Holding Corporation of India Ltd. They don’t have an upper investment limit and mature in six years with an 8 per cent annual interest, paid half-yearly.
Corporate bonds: These moderate-risk investment tools are debt instruments issued by companies to raise capital. Typically, they offer higher returns than government securities but carry credit risk.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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Delhi, India, India
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