General, Investment, Mutual Funds



Investment means acquisition of goods, shares and bonds to create wealth for the future purpose. These investments are to be carefully planned else one should be ready to face the risk of loss. One has to plan this with lot of attention about the capital protection rather than the high appreciation. Individual who is not ready to face the risk of loss of capital can opt for the risk free investment options that give capital protection and returns as well and save their earnings in lucrative manner.

Here, we can see some options that are risk free and yield benefits:

1. Savings account:

This is the usual way one save their earnings and managing finance and finding a quick loan. It has become the necessity of everyone for saving the earnings at moderate interest. The rate of interest offered on your savings is up to 4% per annum. It is an ideal place to save money and suitable for people who wants to make withdrawals anytime of the year.


The interest rate on savings account is 4% per annum. Though the interest rate is low people choose this on the ground of capital protection.

2. Fixed and Recurring Deposits:

Fixed deposits are one of the popular investment programs that allow a high rate of interest on the deposits than the savings account. In this scheme of investment a lump sum amount is deposited for certain period of time which results in good yield of interest and also guarantee the capital after the date of maturity. It is completely risk free and assures capital protection. The investor can hold the money any number of years with the bank and the rate of interest charged is from 6.4% to 8% depending on the time period of investment. Premature withdrawal is allowed but has to penalty for withdrawing.

If look at recurring deposits, it is a deposit done in regular intervals i.e. every month till the completion of a specific period to get a guaranteed return. This also has a fixed interest rate that gives an estimated returns and the interest rate ranges between 5.9% to 7.9% per annum. Premature withdrawal is not allowed. Some banks allow this by charging penalty.

3. Mutual Funds:

Mutual fund pools money from different interested investors and manage it professionally for the purchase and sale of the securities may be retail or institutional in nature. .Mutual funds such as debt and Gilt carry low risk and assures the capital protection. GILT funds are primarily issued by the government they can also be issued by the companies. This invests in government bonds, debentures, securities etc for short, medium or long term depending on the investment objectives. Choosing the plans and schemes that provide moderate rate of return by assuring the capital protection can be the best investment option. Any plan or scheme related with Mutual Funds does not assure a fixed rate of return as they are completely dependent on the market conditions.

4. Post Office savings:

Post offices also provide various schemes to invest and save the earnings. They assure the investment done with better returns. The investment in any of the post office savings schemes is ideal and yields a high rate of interest. The best thing that an individual can do is to invest in any of schemes yield guaranteed returns. Savings account provides a 4% interest, NSCs provide 7.6%, time deposit provides up to 7.4%, Kisan Vikas Patra (KVP) provides 7.3%, PPF provides 7.6% etc.

5. Public Provident Fund:

Public Provident Fund is one of the popular saving instruments that guarantee the returns. It also comes with benefit of tax free nature. The scheme is for 15 years period and can be extended later and also provides a facility of depositing the money in installments that made investors to deposit in a flexible way. The installment should be deposited before 5th of every month in order to get the interest for the whole month. The interest rate generally ranges between 7% to 8.9% depending on the tenure of the investment. An amount Rs.1.5 lakhs is the maximum that can be deposited in a year. If the amount invested exceeds the limit then it will be taxable. Premature withdrawal is not allowed except in some exceptional cases like death or life threatening illness etc and that can be withdrawn only after the period of 5 years of investment.

The above mentioned are some risk free investment options that can give good returns which are fixed and not change according to the market conditions. One has to be clear with his objective and need of investment before investing.




CA Rachit Jain

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