Even the safest investment instruments are associated with some form of risk. The key is to develop strategies that will help you tide over accompanying risks and maximise returns. You can beat the odds by selecting secure investment options that help generate steady returns and expose you to nominal risks. To that end, here’s a list of safe investment options.Read on to find more about their USP and whether they would suit your investment profile or not!
These investment instruments are issued by the government, corporations, or reputed financial institutions to raise capital from the public. These are lucrative options for investments for short terms, say, a year or so. A few examples of money market securities include banker’s acceptance, commercial paper, certificate of deposit, etc. These securities are highly liquid and safe.
These bonds are among India’s best investment options in India for risk-averse investors as they come with a promise of fixed returns at regular intervals. Since the government issues them, investors are exposed to negligible credit risk. You can invest in government bonds directly without a stock broker’s help by registering on stock exchanges for non-competitive bids. Note that you would require a Demat account to hold these bonds.
The Central Government issues treasury bills, which come with a maturity period ranging anywhere between 91 days and 364 days. Generally, treasury bills are discounted at issuance and redeemed at face value. As the government backs them, they come with high liquidity and minimal risk.
Not a fan of investing in single investment options? Consider parking money with debt mutual fund schemes! These MF schemes allocate a large percentage of its accumulated funds – at least 65% - to debt instruments that yield fixed income and expose investors to low risks. These investment options work best in the short-term and protect the investment from interest risk. Short-term funds, liquid funds, income funds, dynamic mutual funds, monthly income plans, etc., are some of the most popular debt funds.
Company invoices are rapidly emerging as one of the best and safest investment options in India. Discounting platforms only auction pre-vetted invoices and disclose each company invoice’s credit rating, making it easier for investors to pick the safest one among the lot. Above all, company invoices come with a short maturity period – a maximum of 90 days – and yields return anywhere between 12% to 20%.Other than these, conservative investors may consider parking money at savings schemes like fixed deposit, National Savings Scheme, and PPF. They come with a fixed investment horizon and expose investors to negligible risks. However, they are not very effective in terms of returns.
Though these are among the safest investment options, some may prove better than others in terms of returns. As an investor, make sure to weigh your investment goals, time horizon, and overall risk tolerance to decide which one of them is a more secure investment choice. However, remember that investment schemes with the lowest risks generate low to moderate returns. To maximise returns while keeping returns to a minimum, consider diversifying your portfolio with different asset classes.
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