Risk-free Investment: In recent years, the popularity of Systematic Investment Plans (SIP) has surged significantly. This increase was primarily driven by a consistent rise in the market, leading investors to experience substantial returns. However, with the recent sharp decline in the market, many investors are now expressing concern. The mutual funds in which they have been investing through SIPs for the past four years have yielded negative returns, indicating not only a loss of returns but also a decrease in the principal amount. If you find yourself among these investors, it is crucial to recognize that SIP is not the sole investment option available.
Fixed Deposit (FD)
A Fixed Deposit (FD) remains a reliable choice for investors seeking low-risk and guaranteed returns. The associated risk is minimal, and the returns are predetermined. Additionally, FDs offer several advantages, including the flexibility to withdraw funds as needed. Banks also provide loan facilities against FDs, and there are tax benefits available.
Public Provident Fund (PPF)
The Public Provident Fund (PPF) is a widely recognized savings scheme in India, currently offering an interest rate of 7.1%. This scheme is entirely secure, backed by government guarantees. The maturity period for PPF is 15 years, with the option to extend it for an additional five years. Investing in a PPF also allows for tax deductions under Section 80C of the Income Tax Act.
Recurring Deposits (RD)
A Recurring Deposit (RD) is a savings plan provided by banks and post offices, enabling small investors to contribute a fixed sum at regular intervals over a specified period. RDs are regarded as a secure investment option, making them suitable for individuals seeking short-term investment opportunities.