Seven best fixed-income investment options

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Fixed income investments are not like equity investments. It focuses on stability, downside protection, safety, and liquidity whereas equity investments focus on growth and higher returns. Several fixed-income investments offer guaranteed returns and safety of capital. The following are the 7 best fixed-income investment options.

  • Public Provident Fund (PPF): Public Provident Fund is the safest investment having a maturity of 15 years. This can be further extended to 5 years. PPF is deductible under section 80 C of the income tax act. Currently, it offers a 7.1% return per annum. It is not a fixed return, the government revises it every quarter. It is not subjected to market risk.
  • Bank Fixed Deposit (Bank FDs): It is the most commonly preferred investment option. The bank deposits up to ₹5 lakh are insured by the Government, in case of a bank failure. All types of accounts and all types of banks operating in India come under this scheme.
  • 7.15% RBI Floating Rate Savings Bonds: The floating rate savings bonds having a maturity period of 7 years. 7.15% interest rate is fixed for the period starts from 1st July to 31st December. It is payable in January next year. The minimum investment is Rs.1000and there is no maximum limit. It is fully taxable
  • Senior citizen Savings Scheme (SCSS):  An individual having an age of 60 and above can open an account for this investment. An account holder can deposit up to 15 lakh. Currently, it provides an interest rate of 7.4% per annum. The maturity period is years and further can be extended to 3 years. Interest pays quarterly.
  • Post Office National Savings Monthly Income Account (POMIS): It is a five-year investment plan providing an interest rate of 6.6% per month. The maximum investment under single ownership is  Rs.4.5 lakh and Rs.9 lakh under joint ownership.
  • Sukanya Samriddhi Accounts:  The government of India backed scheme is targeting parents of girl children. The account can be opened up to the age of 10. It provides an interest rate of 7.6% per annum. Once the child turns to 18 years then only the partial withdrawal is allowed. It is deductible under section  80 C of the income tax act up to Rs.1.5 lakh.
  • 5-year National Savings Certificates (NSC):  This is also a post office savings scheme providing a safety capital for individuals. Currently, it offers an interest rate of 6.8 % compounded annually and payable on maturity.  This deposit is subjected to tax rebates as well.

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