RESUME APPLICATION PAY PREMIUM
Fund Performance

Fund Performance

Knowledge Center

Knowledge Center

About Us

About Us

Tools and Calculators

Tools & Calculators

Quick links

Mobile (Download app)
  • Webpages
  • Documents
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment

For NRI Customers

(To Buy a Policy)

(If you're our existing customer)

For Online Policy Purchase

(New and Ongoing Applications)

Branch Locator

For Existing Customers

(Issued Policy)

Fund Performance Check

RESUME APPLICATION PAY PREMIUM

What do you want to do?

Quick links

Mobile (Download app)

Download HDFC Life App

Buy plans, track your policy, make renewal payments & monitor fund performance with HDFC Life App, Download Now!

Apple Logo Go to Google Play Store

Low-Risk Investment Options Offering High Returns in India 2024

down-arrow
Low-Risk Investment Options Offering High Returns in India for FY 2023-24
August 05, 2024

Table of Content

 

In this policy, the investment risks in the investment portfolio is borne by the policyholder.

Low risk high-return investments are preferred whether the investor is new or professional in the investment field. They belong to the cautious group who wish to get the benefit of growth while protecting their money from potential loss. 

Though capital loss can be prevented in low-risk investments, limitation in returns is the price you pay. However, with diversification, low risk investments can help if you are looking for savings to accomplish goals within close range, like repaying a mortgage loan. 

How To Get The Highest Returns At The Lowest Risk?

Following specific investment strategies that can fetch the highest returns at the lowest risk. Some of the tried and tested strategies for low risk high return investments are:

Diversification

A diverse portfolio, i.e., investing in different assets, is the best way to mitigate the risk in market-related investments. The loss, if any, in one asset can be neutralised by the higher returns from another asset.

Risk-Tolerance

Before deciding between long-term investment options with high returns or short-term investment options with stable returns, you should be able to assess your risk tolerance. Risk tolerance is the extent of loss in investments that you can handle.

Investment Horizon

The timeline given for any investment plan to earn returns is the investment horizon. It could be a few years to decades. The investment horizon again depends on your financial goals. Interest compounds exponentially, so high-yield accounts will generally be long-term investments.

Research and Expert Advice

If you are a beginner in investment and find it confusing to understand market trends, seek professional advice before deciding on an investment option. If you can comprehend the investment options, conduct thorough research for an informed decision.

13 Best Low-Risk Investments for 2024

Here’s a list of 13 low risk high return investments in India in 2024:

1. High-Interest Savings Account

High-yield savings accounts have been offering a unique combination of moderate returns, highest degree of liquidity, and the safety of RBI’s backing. The risk of losing money in RBI regulated banks is extremely low, and there are many private and small finance banks that are currently offering high interest rates on savings accounts, thus making them a great option to park your money and fetch decent returns.

Level of Risk: Very low

Potential returns: Moderate returns, depending on prevailing interest rates

2. Annuities

Annuities are among the most popular retirement planning ways. It is a formal contract signed between you and an insurer, in which you make either a lump sum payment or regular smaller payments to the insurance company and in return, the insurer gives you a payout at pre- decided time intervals, or immediately, according to your financial requirements.

The degree of risk in annuities is very low, whereas the returns are usually moderate, depending on the chosen annuity plan.

Level of Risk: Very low

Potential returns: Moderate

3. Money Market Mutual Fund

These mutual funds invest in fixed-income securities that have short maturities as well as very low credit risks. Because of the kinds of investments such mutual funds make, they are often considered very less risky and offer moderate returns. Money market mutual funds are generally used to park your money in order to keep it accessible or an expected investment opportunity or big purchase.

Level of Risk: Low

Potential returns: Moderate

4. Municipal Bonds

Municipal bonds involve low to moderate risk and are funded either by tax collection or some other government revenues like bridges or toll roads. However, a less active secondary market participation by such bonds often make them less liquid than other securities.

Level of Risk: Moderate

Potential returns: Low to moderate

5. Certificate of Deposits

Certificate of deposits (CDs) are time deposit accounts that allow you to invest your money at a particular rate for a fixed tenure. High yield, step up, regular, and jumbo are some types of CDs. In India, CDs need to be registered with the market regulator SEBI, thus making them a low risk investment option.

Level of Risk: Very low

Potential returns: May offer returns similar to or more than high-yield savings accounts

6. Debt-focused Unit Linked Insurance Plans (ULIPs)

ULIP plans that invest their premiums in debt instruments or money market instruments, bonds, government securities, etc, are termed debt-focused ULIPs. Given that such ULIPs offer stable returns at low risk, they can be suitable for investors seeking capital preservation along with predictable returns.

Level of Risk: Low

Potential returns: Low to moderate

7. Treasury Bills

Treasury bills are considered among the safest investment options, as they are completely backed by a sovereign guarantee. Historically, India has been consistent in payment off its debt, thus making T-bills a lucrative low risk investment option offering low to moderate returns. T-bills in India have maturities of 91 days, 182 days and 364 days. Treasury bills are sold at a discount on their face value, and then the difference between the purchase price & par value at redemption becomes your return.

Level of Risk: Very low

Potential returns: Low to moderate returns, depending on maturity

8. Fixed Deposits

Bank FDs are among the simplest and most popular forms of low-risk investment for the short term and medium term. The interest rate gets locked for the entire FD tenure, thus minimizing the risk of losing your money. The returns from FDs are generally low to moderate, depending on the choice of bank and tenure.

Level of Risk: Very low

Potential returns: Low to moderate

9. Series I Savings Bonds

This is a low-risk bond that provides inflation adjusted returns. Whenever the inflation rate rises, these bonds' interest rates get adjusted upwards. However, the vice versa is true, too, so when the inflation rates fall, the bond's returns fall, too. However, since these bonds are backed by the govt, they have very low risk.

Level of Risk: Very low

Potential returns: Depends on the inflation rate

10. Corporate Bonds

Corporate bonds are debt securities issued by both private and public companies. Companies issue corporate bonds in order to raise money for purposes such as business expansion or purchase of new equipment. When you buy a corporate bond, you lend money to the issuing company, who in exchange premises to return your money on a specific maturity date, until then they usually pay you interest.

Given that a company may face harder financial days someday in future and watch their credit rating go down, corporate bonds do carry moderate risk.

Level of Risk: Moderate

Potential returns: Moderate to high

11. Preferred Stocks

Preferred shares are securities that represent ownership in a particular company. They combine the characteristics of stocks & bonds into one security. Such stocks are considered senior to common shares, which is why they tend to have a priority claim on the company's assets, earnings and dividend payments.

Preferred stocks not only provide investors with dependable income payments, but also the potential of upward movement in the prices of shares over time. While their degree of risk is moderate, their returns too, are moderately high. This makes such stocks an option you can consider for low risk high return investments.

Level of Risk: Moderate

Potential returns: Moderately high

12. PPF (Public Provident Fund)

PPF (Public Provident Fund) is a long term investment option backed by the government. PPF offers guaranteed and low to moderate returns, along with minimal risk. They have a lock-in period of 15 years, and the returns have been in the range of around 7%-8% in recent years.

Level of Risk: Very low

Potential returns: Low to moderate

Financial Year

PPF Interest Rate

1986-87 to 1998-99

12%

01.04.1999 to 14.01.2000

12%

15.01.2000 to 28.02.2001

11%

01.03.2001 to 28.02.2002

9.5%

01.03.2002 to 28.02.2003

9%

01.03.2003 to 30.11.2011

8%

01.12.2011 to 31.03.2012

8.6%

01.04.2012 to 31.03.2013

8.8%

01.04.2013 to 31.03.2016

8.7%

01.04.2016 to 30.09.2016

8.1%

01.10.2016 to 31.03.2017

8%

01.04.2017 to 30.06.2017

7.9%

01.07.2017 to 31.12.2017

7.8%

01.01.2018 to 30.09.2018

7.6%

01.10.2018 to 31.06.2019

8%

01.07.2019 to 31.03.2020

7.9%

01.04.2020 to 30.09.2024

7.1

*These are PPF interest rates for the last 25 years, i.e. since 1999-2024. [1]

Source: https://www.nsiindia.gov.in/(S(p4xfg3qc1xec0afz2tndexbq))/InternalPage.aspx?Id_Pk=178

13. Gold

Gold is a precious yellow metal in which you can invest in various ways, such as purchase of physical gold, digital gold, gold mutual funds, gold ETFs, etc. Although gold sees ups and downs in its prices, but over the long term, gold has witnessed strong upwards movement historically. Besides possessing a low degree of risk, gold has managed to shine as an investment option by offering moderate to high returns, especially over the long run.

Level of Risk: Low

Potential returns: Moderate to high 

What To Consider For The Low-Risk Investors?

The things that low-risk investors should consider before making a decision are:

Financial Goals

Know your financial goals before you dive into investments. Draw a financial plan and assess your risk tolerance level. All assets are not money-making assets. Some level of risk is involved in every asset. Seek expert advice for more clarity between savings and investment options for an informed decision.

Assess Your Risk-taking Comfort Zone

Every investment option has some degree of associated risk. Be very cautious when investing in stocks, mutual funds, or bonds, as they are not as safe as investing in deposits at banks with FDIC insurance. Stocks, mutual funds, or bonds are securities where you either get good returns or lose some or all the money invested.

For financial goals with long time horizons, investing in instruments with greater risk like stocks, mutual funds, etc. Investing in low-risk instruments like cash securities is a good option for short-term financial goals. Solely investing in cash securities is not considered a hedge against inflation. A mix of low and high-risk investments is regarded as smart investment.

Create An Emergency Fund

A smart investment strategy is to put aside a minimum of 6 months’ income in a savings product where the funds are easily accessible during emergencies or if the regular income stops.

Clear High-Interest Debts

Debtis carrying high interest, like personal loans, credit card dues, etc., can impact your savings. Pay off the debts as early as possible; this can be the best investment strategy with low risk and high returns. 

Review Your Portfolio At Regular Intervals

With fluctuating market conditions, it is advisable to review your portfolio regularly and do some reshuffling if necessary. Professional investors identify the risk weightage of an asset in advance. Reviewing will help balance your portfolio when the weightage goes up or down over and above the risk weightage assessed in advance.

Trust Reliable Sources Only

Do not get lured by investment opportunities that sound legitimate. Seek information from unbiased sources before investing in such products. You may fall prey to scams by investing in these opportunities with information that comes from unreliable sources. 

Conclusion

Investment is all about smart planning. High-risk instruments can turn out to be high-return investments if you stay invested for longer periods. Individuals with low-risk appetites prefer low risk high return investments. With an array of low-risk, high-return options available, you can align your investments as per your financial goals, risk appetite, and time horizons for a robust financial future. 

FAQs on Low risk investment options

Q. What is low-risk investing?

Low-risk investing is investing in instruments with minimal losses while you get sufficient returns. Some of the low risk high return investments include fixed deposits, fixed annuities, money market mutual funds, corporate bonds, etc.

Q. What investment is 100% safe?

No investment option can be considered 100% safe. However, for those seeking low-risk investment options with high returns in India, bank fixed deposits (FDs), savings accounts, and Public Provident Funds (PPFs) are among the safe choices.

Q. Which option is an example of a low-risk investment?

Low risk investment options include corporate bonds, bank FDs, savings accounts, ULIPs, PPF, gold, treasury bills, etc.

Q. What is the safest investment with the highest return?

The safest investment with the highest returns is where interest is compounded exponentially, and your money grows rapidly. The products you invest in turn out to be low risk high return investments if the time horizons given are longer. 

Q. When should you buy low-risk investments?

You can choose to invest your funds in Low risk investments for short-term financial goals and to create emergency funds.

Q. What factors should I consider when choosing a low-risk investment?

Factors that you need to consider when choosing a low risk investment option, include your risk appetite, financial goals, investment horizon and expected returns.

Q. What are the advantages of investing in a fixed deposit?

The advantage of a fixed deposit is your principal is safe while you get good returns in comparison to an investment in a savings account. Also, you have the option of availing of a loan when you need emergency funds instead of preclosing the deposit. This is considered one of the best low risk investment options in India.             

Q. Which investment gives the highest return?

Government Bonds, Gold Bonds, Gold Mutual funds, etc., are low risk investments that fetch the highest returns.

Q. Are there high-yield, low-risk investment options?

Yes. There is an array of high-yield, low risk investment options in India like Fixed Deposits, Annuity, PPF, Municipal Bonds, Money Market Mutual Funds, Treasury Funds, etc.

ARN - MC/07/24/13564

Term Plan Articles Term Plan Articles

Investment Articles Investment Articles

Savings Articles Savings Articles

Life Insurance Articles Life Insurance Articles

Tax Articles Tax Articles

Retirement Articles Retirement Articles

ULIP Articles ULIP Articles

Health Plans Articles Health Plans Articles

Child Plans Articles Child Plans Articles

Popular Calculators Popular Calculators

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

LinkedIn profile
Author Profile Written By:
Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

LinkedIn profile
Reviewed By Reviewed By:

Here's all you should know about life insurance.

We help you to make informed insurance decisions for a lifetime.

How Rising Interest Rates Impact Your Investments—and What You Should Do About It

How Rising Interest Rates Impact Your Investments—and What You Should Do About It

How rising interest rates impact your investments and ways to adapt. Stay informed to make smarter financial decisions and protect your financial future.

Preserving Your Investment: How New Tax Rules Affect Real Estate Sales Before 2024

Financial Freedom for Women Entrepreneurs: Unlocking Success with the 50-30-20 Strategy

Baby Steps to a Secure Future: Financial Planning and Wealth Management

Essential financial planning and wealth management strategies for families. Secure your future and confidently navigate parenthood with these key insights.

Baby Steps to a Secure Future: Financial Planning and Wealth Management
Best Investment Options for Salaried Individuals Previous
Wealth Creation Plans – Strategies for Financial Growth & Freedom Next
HDFC life
HDFC life

HDFC Life

Reviewed by Life Insurance Experts

HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER

We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

Disclaimer

# Subject to conditions specified u/s 80C of the Income tax Act, 1961.

# The afore stated views are based on the current Income-tax law. Also, the customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.

The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year.

Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.

Popular Search

Popular Searches