When it comes to investing money by considering safe investments with high returns in India, the first thing Indian people think of is FD.
Because it is safe.
However, it has an extremely low-interest rate, so it cannot beat inflation.
Also, there are other safe investments with high returns in India in which you can invest and beat inflation.
Safe investments are not only for conservative investors but also who want to diversify their portfolios.
It is better to keep both high-risk and low-risk investments for balancing out.
Thereby you do not just beat inflation but also can build wealth.
This article will look at the best safe investments with high returns in India in 2022.
1. RBI bonds
RBI bonds are saving (taxable) bonds issued by governments.
The RBI bonds have an 8% annual interest rate.
It has a maturity of 6 years.
You cannot withdraw your money before maturity because it is not tradeable in the secondary market.
There are no upper limits on the investment amount.
You can invest as much as you can.
Anyone can invest in the RBI bonds except NRIs.
Your Rs 1000 invested now would be Rs 1601 after the end of the maturity (that is after 6 years).
This is the best safe investment with a high return in India.
2. Large-cap funds
Large-cap funds are mutual funds that invest in large-cap stocks.
Large-cap stocks are stocks that have market capitalizations of 20,000 crores or more.
In short, they invest in big companies that have already established businesses.
They are a safe investment with high liquidity.
Large-cap funds are the best for people who want steady returns and lower risk.
For getting the most benefit from these funds you should invest for 5 years or more than that.
In large-cap funds, you can get up to 8% to 20% return in India.
There is no upper limit of return.
3. Debt mutual funds
Debt mutual funds are funds that only invest in debt securities.
Such securities are bonds of all types, money market funds, etc…
If you want to invest in debt but do not want it directly then the debt mutual funds are the best one for you.
The return you can get on debt mutual funds is 7% to 9%.
You can sell your investment anytime if the fund has no lock-in period.
4. Hybrid funds
Hybrid funds invest in both debt and stocks.
Because it is investing in both, it balances out risk.
Stock and bonds always move as opposed to each other.
As you can see in the chart.
It happens because when stock becomes risky people often sell it and buy the debt securities.
As increase in demand the bond price rises.
Therefore, if you do not want to invest in a particular asset you can invest in both by hybrid funds.
Gold is the traditional investment for Indians, and it is also the most preferred one.
High liquidity and beating inflation are gold’s strongest selling points.
It is better for diversification because when the market is tough it tends to perform well relative to the stock market.
“Gold’s returns in rupee terms over the past 15, 20, and 25 years are 11.6%, 12.4%, and 9.4% CAGR, respectively.” Source Livemint
You can directly invest in the gold by buying physical gold, coins, and jewelry.
However, now there are other ways of investing in gold such as Gold ETFs and mutual funds.
Whereby you do not have to store physical gold.
Although it is your choice in which you want to invest.
Invest in whatever you are comfortable with.
6. Real estate
Real estate is real property that consists of buildings, lands, etc…
You buy and sell real estate for the sake of profit.
Real estate has a low correlation with the stock and bond market.
Whereby it becomes a great investment for diversification.
There are two ways to invest in real estate:
Indirectly through REIT (real estate investment trusts) which allow you to invest in real estate without the physical real estate.
The CAGR of real estate for 10 years has been 10% which meets the criteria of safe investments with a high return in India.
7. Public provident fund (PPF)
The public provident fund is a post office saving scheme that offers a return on invested capital.
It is launched by National Savings Institute.
The return on investment is not taxable.
Therefore, it is the best safe investment with a high return in India.
Government backs it, so the return is guaranteed.
The minimum deposit is Rs 500, and the maximum is Rs 1,50,000 in a year.
PPF has a lock-in period of 15 years.
And if you want to invest more you can extend 5 years after 15 years.
You can withdraw money every year from the 7th financial year.
However, you can take a loan from the 3rd year up to the 6th financial year.
The Interest rate on a public provident fund is 7.1% as of now.
The return is compoundable.
In a nutshell, a Public provident fund is a long-term investment with 7.1% interest compounded annually, not taxable, lock-in period of 15 years, and can extend after 15 years in a 5-year block.
It is the best safe investment with high returns in India among all other investments.
8. Corporate bonds
Corporate bonds are issued by companies for raising money for numerous reasons such as scaling business, acquisitions, etc…
The issuer of the securities can be either the private or public sector.
It has a maturity of more than one year.
The corporate can give up to 7% to 12% per year.
Its liquidity is based on specific bonds, generally high or moderate.
Also, if you like the corporate bonds but do not want to invest directly then choose the mutual funds or ETFs that invest in corporate bonds.
Conclusion on safe investments with high returns in India
These 8 are the best safe investments with high returns in India.
Whether you’re a risk-averse or a moderate investor, include a few of these investment options in your portfolio.
It balanced out your portfolio.
Now, let me know in the comment section,
which of these investments you’re going to invest in?
Or what do you think is the best investment option for you?