Let’s face it, the future is lined up with expenses. To manage these expenses and lead a comfortable life, having financial security is important. Gone are the days when you could afford everything on a single paycheck. Investment is essential if you want to ensure that you have sizeable wealth to fulfil your financial needs.
Even though investment is essential; it still remains a risky affair – especially when you are a beginner at investing. This is where guaranteed returns investment options come in to save the day.
What are Guaranteed Returns Investment Options?
As the name gives it away, guaranteed returns investment options consist of tools that offer fixed returns. These types of investment options are ideal for individuals who don’t consider themselves an expert at investing, and those who prefer investment safety over high returns.
Here are the Best Guaranteed Returns Investment Options you Can Pick:
1. Max Life Smart Fixed-return Digital Plan (Max Life Smart FD):
All-in-one plan Max Life Smart FD offers you multiple benefits. These benefits include guaranteed returns, a sizeable life cover and tax exemption on the amount invested. This plan is ideal if you are looking to earn returns in a short period of time.
Smart FD plan comes with tenures as low as 5 years, which is comparatively lesser than other investment options in the market; thus, ensuring higher flexibility when it comes to withdrawal. On top of that, this plan offers you a high rate of return, thereby securing your investment while providing you adequate returns.
2. Fixed Deposit:
Fixed deposit is offered by banks and financial institutions. It is a preferred savings choice for individuals who prioritize investment security and wealth building. Fixed deposits require the investors to deposit a lump-sum amount that earns interest according to the interest rate fixed by banks and financial institutions. Therefore, however the market conditions are, a fixed deposit would earn a definite return.
The tenure of a fixed deposit varies from bank to bank; it ranges from 7 days– 10 years, depending on your financial goals and requirements.
3. Tax-Saving Fixed Deposit:
One of the most popular types of fixed deposits is the tax-saving fixed deposit. As the name suggests, this type of fixed deposit can help you save tax apart from helping you meet your savings goals. Investors can avail a tax deduction under Section 80C of the Income Tax Act.
There are two types of accounts you can open – A single holder and a Joint holder. The tax-saving fixed deposit comes with a tenure of 5 years, before which you cannot withdraw the fund.
4. Public Provident Fund:
Public Provident Fund is a savings scheme launched by the Government of India with the objective of helping individuals generate a savings corpus to fulfil their financial needs after retirement. It offers a specified interest rate which is set by the government every quarter.
PPF account comes with a minimum tenure of 15 years, before which you cannot go for complete withdrawal. Withdrawals would be allowed only in certain cases. Investors can also take advantage of the numerous tax benefits that are applicable to the Public Provident Fund under Section 80C of the Income Tax Act and the returns are also tax-exempt. As PPF offers returns according to a fixed interest rate, you get guaranteed tax-free returns.
5. Post-Office FD:
Apart from banks and financial institutions, post offices also offer Fixed Deposits. The minimum deposit required to open a Fixed deposit account in the post office is INR 1000. There is no maximum amount that can be invested. The investment tenure for post-office FD can go up to 5 years. However, premature withdrawals are permitted after 6 months. Post office returns are guaranteed by the Government of India, according to the interest rate determined by them.
6. National Savings Certificate:
National Savings Certificate or NSC is a savings product offered by the Government of India. The objective of NSC is to promote investment by individuals having small to moderate income. NSC works differently than other investment options. While other investment options require you to invest a certain amount into the scheme, the National Savings certificate requires you to purchase certificates in various denominations. NSC earns fixed returns according to the set interest rate. The interest is compounded annually; however, it is paid out only at maturity. Under Section 80C of the Income Tax Act, you can claim tax exemption to save on taxes but the maturity benefit is taxable
*This is applicable for a 30-year-old male paying Rs. 20,000 per month for 5 years with a policy term of 10 years
Importance of Short-Term Guaranteed Returns:
These guaranteed returns investment options are ideal for you if you are looking to make short-term investments. Here’s why short-term guaranteed returns investment options are important:
1. You Remain Protected from Market Fluctuations:
One of the greatest challenges of investing is analyzing the risk. Investing in the security market comes with numerous risks. However, when you are choosing short-term guaranteed returns investment options, you remain protected from market fluctuations. Most of the investment options available in this category offer return according to a defined interest rate. Consequently, the investment stays protected, and the returns remain guaranteed even when the market is crashing down or seeing great progress.
2. Helps you Meet your Short-Term Financial Goals:
Short-term financial goals are as important as long-term financial goals. With these guaranteed income short-term investment schemes, you can meet your short-term goals efficiently.
3. Helps you Plan your Financial Future:
When your short-term goals are taken care of, you can plan for your long-term goals efficiently. Whether it is to buy a car, pay for your child’s education or save for your retirement, these guaranteed income plans are ideal when it comes to fulfilling your short-term investment goals and aiding your long-term financial objectives.
4. Helps you Save Taxes:
If you are someone who wishes to save on taxes, these short-term guaranteed returns investment schemes are what you need. You can avail a tax deduction under Section 80C of the Income Tax Act and save tax in a financial year.
Concluding Thoughts: Which Short-term Investment Option to Choose?
There are multiple short-term investment options that provide guaranteed returns. However, which one should you go for? Which is the best? Our recommendation? Max Life Smart FD Plan! This all-in-one plan offers you a life cover along with a savings corpus and tax benefits. No other short-term guaranteed income plan offers you that. On top of it, the Max Life Smart FD plan provides the highest rate of return (7.21%) if you compare it to other investment alternatives. You can also save tax on the premium paid. Thus, by paying a nominal premium, you get all these advantages. You won’t be required to buy life insurance separately if you go with this plan.
This article is generated and published by FPJ focus team. You can get in touch with them on firstname.lastname@example.org