There is a wise saying, “No pain,
no gain”. Almost all of us want to invest money in such a sector where the
return is high but risk is zero. That means, we want to make profit without
risking anything. Unfortunately, this is impossible. If someone try to lure you
for such a scheme where investment is totally risk free but return is
unbelievably high, be sure he is a fraud and telling about something utopian.
In fact, risk and profit has very
friendly relation in real life! The more you are ready to take risk, the more
your earning is going to be. Still, there are some sectors with comparatively
low risk and decent amount of returns in India. Especially the beginners can go
for these options to start their investment with no imminent risk. Let’s see
what those sectors are.
1. Direct equity
Direct equity could be one of the best options for investment though the risks are higher. Investing in stock market is not everyone’s cup of tea as it requires a lot of practical and technical knowledge. One needs to know the basics of stock market, need to know how to choose the best stock and how to hedge losses.
Yes, there are options which can
effectively reduce your loss to any extent you want in stock market investment.
You can use portfolio hedging methods like futures and stop loss to protect
your capital from big loss. Besides, if all goes well, stock market is always
efficient to bring high returns adjusted to inflation.
2. Public Provident Fund
Public Provident Fund or PPF is
one of the safest investment sectors in India. Though the sector doesn’t
promise high amount of return, but with the sovereign guarantee system, you can
ensure the safety of your capital. Furthermore, PPF has a comparatively long
tenure of about 15 years which brings huge tax free interest.
3. Fixed Deposit
Bank Fixed Deposit is a great option for investing money without any substantial risk in any country. Fixed deposit is a financial scheme provided by banks to its customers through which they give the customer a higher rate of interest than regular savings account. In India, customers may opt for monthly, quarterly, half-yearly, yearly or cumulative interest options for their fixed deposit account. Deposit Insurance and Credit Guarantee Corporation (DICGC) in India has rule of insuring up to Rs 1 lakh for any depositor. So, it is clearly a safe way to invest.
4. National Pension System
Pension Fund Regulatory and
Development Authority or PFRDA operates all the pension schemes and policies in
India. It’s a long term retirement investment policy. To keep a NPS tier-1
account active, one needs to contribute just Rs 1000 annually till retirement.
In India, NPS has various financial service options like direct equity, fixed
deposits, corporate bonds, liquid funds and government funds. You can choose
one as your wish.
5. Senior Citizen Savings Scheme
Senior Citizen Savings Scheme or SCSS is the best investment option for the senior citizen or retirees. Those who are aged over 60 can go for this investment scheme. One can invest up to Rs 15 lakh and the interest rate is 8.3 per annum. Investment tenure is 5 years long and one can extend it for 3 more years once the scheme is matured.
6. Debt mutual funds
Debt fund is a great option for investors who want steady flow of returns. It is much safer option than equity investment. Even, the return is decent considering the constant flow. The process requires investing in fixed-interest making securities including corporate bonds, government securities, treasury bills, commercial paper and other financial instruments. 1 year scheme has 6.5 percent interest rate while 3 and 5 years scheme have 7.5 and 8 percent interest rate respectively.
7. Real Estate
Real estate investment could be an
ideal investment scheme for those who have bigger amount of idle money. You can
buy a home for living which will be your investment at the same time. One
important thing about investing in real estate is the choice of location. You
have to choose a perfect location where the land price is increasing fast or
rental is high.
Real estate investment can return your profit in 2 ways- capital appreciation and rental. The first one is a process that need frequent involvement while the second one is a one time job done. You can either buy plot to sell it after some years while the price has increased significantly. Or you can simply buy a property or build a home to earn steadily from rental.