Best and Safe Investment Plan with High Returns

Fixed Deposits have always been viewed as safe investment havens. However, FD interest rates have been falling since the last few years. Demonetization and falling inflation led to even further decline in FD interest rates. While FDs continue to remain one of the safest forms of investments, you cannot expect them to yield high returns on your investment.

With most banks currently offering just about 6.5 to 7.2 per cent interest rates for tenures that range from 1 to 10 years, conservative investors have begun looking at other avenues to park their funds on a medium to long term basis.

What then are some of the best investments plans with high returns? Let's find out:

Post Office Time Deposit Account (POTD)

Post Offices have been operating in India for over a century now and have a reach that is far wider than the banks. More than 238 million accounts have benefitted from various post office savings account schemes. Post office time deposit scheme is one such scheme. It is quite a popular scheme as it allows investors to park their surplus funds at an elevated rate of interest - much higher than interest rates offered by banks for their 5-year tax-saving deposits that offer just about 7.2 per cent interest per annum.

Features of POTD:

• POTD is available for tenures of 1, 2, 3 and 5 years and the 5 year plan offers a yearly interest rate of 7.8 per cent. 
• The scheme offers an assured return on investment to the investors.
• These accounts are flexible and can easily be transferred from one Post office to the other.
• Account holders can open a number of deposits at post offices of their choice.
• INR 200 is the minimum amount required to start a POTD and there is no maximum amount.
• Non-resident Indians are not eligible to apply for this scheme.
• This scheme doesn't provide a Tax Deducted at Source certificate to the account holder.

5-Year National Savings Certificates (NSC)

This is a lucrative investment scheme offered by the Government of India and is aimed at individuals looking at saving income tax.

Features of NSC:

• A rate of interest of 8.1 percent per annum is offered by the 5-year National Savings Certificates (NSC) scheme.
• Under Section 80C of the Income Tax Act, Income tax up to Rs 1.5 lakh can be saved through this scheme
• There is no minimum limit for purchase of NSC
• NSCs have a maturity period of 5 years.
• The scheme is easily available at all the post offices
• It offers a guaranteed return on investment
• Interest earned is added back to the initial investment and is compounded annually.
• These certificates come in handy while applying for loans from banks.

Kisan Vikas Patra (KVP)

India post launched this saving certificate scheme named Kisan Vikas Patra (KVP) in the year 1988 and is a successful investment scheme that offers high returns.

Features of KVP:

• KVP offers a rate of interest of 7.5%.
• Amount invested in this scheme matures over a period of 115 months.
• This certificate can be purchased by an adult individual or on behalf of a minor.
• The certificate is available at all the post offices
• The scheme has the facility to opt for a nominee.
• Certificate can easily be transferred from one post office to another and from one person to another.
• A minimum deposit of INR 1000 is needed to invest in this scheme. However, there is no upper limit.
• The scheme is available in denominations of Rs 1,000, 5000, 10,000 and Rs 50,000.

Public Provident Fund (PPF)

PPF is one of the most popular saving instruments of the salaried class and is one of the best Investment Plans with High Returns.

Features of PPF:

• PPF allows investors to invest a lump-sum amount of money or in 12 installments.
• A joint PPF account cannot be opened.
• PPF currently offers a 7.9 percent rate of interest which is compounded annually.
• Minimum amount required to open a PPF account is INR 100.
• A minimum of INR 500 is required to be deposited in a financial year to run a PPF account. And a maximum of INR 1,50,000 can be deposited in PPF in a financial year.
• Depositors can nominate a person at the time of opening the account and even after opening it.
• Account can easily be transferred from one post office to another.
• PPF has a maturity period of 15 years and it can be further extended to another 5 years and so on within one year of the PPF maturing.
• PPF doesn't allow premature withdrawal before 15 years.
• Interest earned in PPF is completely tax free.

It is important to note that interest earned on some of these fixed income generating instruments is fully taxable depending on the tax slab the individual falls into. While these may be some of the best investment plans with high returns, the post-tax returns in these instruments aren't as lucrative and only those who are extremely conservative and looking at preserving their capital should invest in them.


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