At present times, there are many investment avenues where you can invest your money. One of the best investment avenues, an investor can make is when the investor starts getting fixed regular (recurring) income as a return from the investment/s made.

These are called safe investment options as the investor grows his or her money with minimum risk. It’s crucial to conduct thorough research and analysis of the investor’s requirements and risk appetite before selecting the right investment type.

India’s current economic situation also suggests that our focus should be on how to combat inflation’s impact on spending and saving. It emphasises investing in financial instruments that could help to beat inflation and earn returns.

If your risk appetite is such that you require safe returns and stability in your income from the investments made, you should consider safe investment opportunities.

So, here are the 10 Safest Investment Options in India in 2024 that you may consider while investing.

Serial No.	Investment Option	Safety Level	Rate of Return	Liquidity	Tax Benefits	Tax Deduction (for tax savings) and/or exemption	Suitability
1	Government Bonds and Securities	Very High	6-7%	Varies	Taxable	For tax-free interest income government bonds, are exempt from tax	Long-term, secure investments
2	Fixed Deposits (FDs)	High	5-7%	Medium (penalty for early withdrawal)	TDS applicable	Income from Tax-saving FD is exempt up to Rs 1.5 lakh per annum u/s 80 C	Short to medium-term savings
3	Public Provident Fund (PPF)	Very High	7-8%	Low (15-year lock-in)	EEE (Exemption- Exemption- Exemption)	Deduction under Sec 80C (up to Rs 1.5 lakh per annum)	Long-term savings, Retirement
4	Unit-Linked Insurance Plans (ULIPs)	Medium	8-10%	Low (lock-in period)	Taxable	Deduction under Sec 80C (up to Rs 1.5 lakh per annum)	Insurance plus investment, Long-term
5	National Savings Certificates (NSC)	Very High	6.80%	Low (5-year lock-in)	Taxable	Deduction under Sec 80C	Long-term, Risk-free savings
6	Gold	Medium	Variable	High	Taxable	Not applicable	Hedge against inflation, diversification
7	Real Estate	High	Variable	Very Low	Taxable	Tax benefits on home loan	Long-term, capital appreciation
8	Post Office Monthly Income Scheme (POMIS)	High	7.40%	Medium	No	Not applicable	Regular monthly income, Low risk
9	Senior Citizens Savings Scheme (SCSS)	Very High	7.40%	Medium (penalty for early withdrawal)	Taxable	Deduction under Sec 80C	Senior citizens seeking regular income
10	Debt Mutual Funds	Medium	6-8%	High	Taxable	Indexation benefit	Short to medium-term, moderate risk

Note the rate of return provided on each of the investment options mentioned above may vary based on market risks and fluctuations.

We hope that this blog guides you on the best ways of investing money in India in 2024, in case you are a risk-averse investor and also seeking a stable income. This makes them better investment options in India in 2024.

Government Bonds or Securities

Government bonds, also known as G-Secs, are generally considered low-risk investments because they are guaranteed by the issuing government. They come at different times, with a fixed interest rate, and can be bought and sold on the stock market.

Key features for investing in G-Secs

• For tax-free interest-income government bonds, exemption from tax is available.
• Very high level of safety as an investment option
• Their liquidity varies from 91 days to 40 years maturity period, based on the type of Government bond
• Appreciation in the G-Sec price is considered long-term capital gain and is taxable at the rate of 10% under the capital gain section in the income tax
• Short-term capital gains are taxable as per the applicable income tax slab.
• No TDS (Tax deduction at source) is applicable for the interest income received from the G-Sec.

Bank Fixed Deposit (FD)

Bank Fixed Deposit or FD, is a type of investment where a person invests with his/her funds in the bank for a certain period. Fixed Deposits made with the bank are considered one of the safest investments in India. FD holders in India can choose to receive interest monthly, quarterly, semi-annually, or annually.

Key features for investing in Bank Fixed Deposit (FD)

• An investor can claim a tax deduction by investing in a tax-saving deposit account under 80 C, as per the Indian Income Tax Act, up to Rs 1.5 lakhs.
• The maturity period for a Bank FD varies from 7 days to 10 years.
• The interest earned from a Bank FD is subject to TDS if it exceeds Rs 40,000 (Rs 50,000 for senior citizens) in a financial year.
• Additionally, interest earned on a Bank FD is also taxable as per the income tax slab.

Public Provident Fund (PPF)

 The Public Provident Fund (PPF) is considered a safe investment option in India, as it’s backed by the Government of India. It has a maturity period of 15 years. Further, it’s not linked to market fluctuations, therefore, it provides guaranteed returns over time. However, at the maturity of a PPF, you have the option to withdraw either the entire amount or opt for an extension of the account in the blocks of 5 years.

Key features for investing in PPF

• PPF has a lock-in period of 15 years
• The interest income received from PPF deposits and the amount withdrawn from the PPF Account on maturity are exempt from tax.
• The maximum amount allowed for investment is Rs 1.5 lakh and the minimum amount allowed is Rs 500, in a PPF account.
• Income from the deposits from a PPF account can be availed for deduction u/s 80 C of the Indian Income Tax Act, for up to Rs 1.5 lakhs per annum.

Unit Linked Insurance Plans (ULIPs)

Unit Linked Insurance Plans (ULIPs) provide both life insurance coverage and return on investment. They divide your premium into a part for life coverage and the rest for funds of your choice. Most ULIPs let you pick from various equity and debt funds. You can also invest in a mix of both fund types based on your risk appetite.

Key features for investing in ULIPs

• ULIPs have a lock-in period of 5 years
• There’s no tax liability on the ULIP investments made before February 1, 2022, of up to Rs 2.5 lakhs investment made
• For long-term capital gains, it’s taxable at 10% on the amount above Rs 10 lakhs
• For the policy premium paid for the ULIPs, a policyholder can get a tax deduction up to Rs 1.5 lakhs per annum under section 10D and section 80C of the Indian Income Tax Act.
• ULIPs attract long-term capital gain tax in India
• ULIPs are one of the safe investment options in India with high returns ranging from 8-10%.

National Savings Certificate (NSC)

National Savings Certificates (NSCs) are a popular Indian Government-backed safe investment option. NSCs offer a secure way to invest and provide a fixed interest rate that is compounded annually. Your investment can grow steadily over a period of time. This makes National Savings Certificates (NSCs) a reliable source and safe source of investment in India in 2024.

Key features for investing in NSC

• NSCs have a lock period of 5 years
• These certificates earn an annual fixed interest, which is revised every quarter by the government of India. Thus, guaranteeing a regular income for the investor.
• The principal amount invested in NSC qualifies for tax savings under section 80 C of the Income Tax Act, of up to Rs 1.5 lakh per annum.
• You can invest Rs 100 as an initial investment with no maximum limit
• The interest rate applicable on NSC is 7.7%

Gold

Be it investing in traditional physical forms of gold or sovereign gold bonds or over ETFs, gold as an instrument has been used to provide hedging against inflation.

Key features for investing in Gold

• Gold received in gift from your inheritance or close family members is exempt from tax, under the Income Tax Act, 1961 in India, u/s 56(2)
• Gold received from non-relatives in a financial year is not taxable up to Rs 50,000, but beyond that, it’s taxable under income from other sources as per the Income Tax Act, India.
• Gold received during your weddings from either relatives or non-relatives, both are exempt from tax in India.
• However, the subsequent sale of your gold will be taxable under the capital gain tax and can be further classified under long-term (more than 3 years) or short-term (up to 3 years) capital gain.
• On digital gold – say for Sovereign Gold Bond or gold traded over the ETF, are taxable at 20.8% for the long-term capital gain tax. Further, for the short term, it’s as per the income tax slab.

Real Estate

Investing in real estate can provide the dual benefit of receiving rental income and appreciation of your capital, i.e. growth in the value of the investment over a period of time. This is considered a safe investment in terms of getting a regular stable income and long-term growth of your capital.

Key features for investing in Real Estate

• If you own a house, then the rental income received from such house is taxable under the house property source of income in India, in the Income Tax Act, 1961. Some tax deductions are also available under section 24 of the act.
• Further, income received from the sale of a house property and commercial property in India is subject to capital gain tax (up to 24 months it attracts short-term capital gain tax, and for more than 24 months, long-term capital gain tax is applicable).
• The Property tax is also imposable on the type of property you possess, whether resident or commercial, in India.
• The rate of return, in the form of rental income or sale proceedings differs from place to place and its calculation is based on several other factors.

Post Office Monthly Income Scheme (POMIS)

Post Office Monthly Income Scheme (POMIS) in India provides a steady source of monthly income from its investment. It’s backed by the Government of India, that POMIS is considered a safe and stable investment option.

Key features for investing in POMIS

• POMIS has a lock-in period of 5 years and can be extended for another 5 years after maturity. Early withdrawal before the end of the lock-in period attracts a penalty.
• The minimum amount of investment that has to be done in POMIS is Rs 1,000. The maximum amount to investment can go up to Rs 9 lakhs for an individual account, and Rs 15 lakhs for a joint account.
• Unlike, other investment options, POMIS is not market-linked, which is why there are no market risks involved.
• POMIS is highly suitable for people who are retired and are looking for a stable and regular source of steady income in India.
• Currently, the interest rate payable to the investors is 7.4% per annum
• POMIS is considered one of the best return investment options in India in 2024
• Income from POMIS is taxable as per the income tax slab in India. However, the investor can’t claim any tax deduction from such income under section 80 C of the Income Tax Act.
• Moreover, section 80 TTA allows the deduction of tax up to Rs 10,000 as per the Income Tax Act, India.

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Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme (SCSS) is another safety investment option in India, especially for senior citizens or retired investors of the country. SCSS provides a steady and regular source of income (which is quarterly received). SCSS is backed by the Government of India and guarantees a risk-free stable income for the investors.

Key features for investing in SCSS

• You can apply for SCSS at approved banks and post offices in India.
• Rs. 1000 is the minimum amount of the investment in SCSS, while investors can invest up to Rs 30 lakhs in SCSS in India
• SCSS has a lock-in period of 5 years, with an option to extend it in increments of 3 years each.
• The Investor has to bear the penalty on pre-mature withdrawal of the investment made.
• SCSS has higher returns than FDs
• The income derived from SCSS is taxable under the regular income slab rate, as per the individual’s income.
• Tax deduction or tax benefit is available up to Rs 1.5 lakhs under section 80 C of the Income Tax Act, India, for the income derived from SCSS

Debt Mutual Funds

Debt Mutual Funds is another safe investment opportunity as it primarily invests in securities that generate regular and steady interest income. They invest in financial instruments such as bonds, and other debt instruments over 65% and the exposure to the equity market is not more than 35%. They are considered less risky than equity mutual funds as they prioritise income generation and preservation of capital.

Key features for investing in Debt Mutual Funds

• Debt Mutual Funds are highly suitable for investors with short to medium-term investment horizons. For the investors seeking less volatility in their investment.
• Debt Mutual Funds don’t have a lock-in period, an investor can withdraw funds anytime they require.
• Income or gains received from Debt mutual funds are taxed as per the investor’s income tax slab rate, in India, since April 1, 2023.
• Since, April 1, 2023, the debt mutual funds in India won’t receive any indexation benefit and are deemed to be taxed as short-term capital gain tax.

Disclaimer: Investing in the Equity market in India is subject to risks, i.e. the market keeps on fluctuating. This article is purely for educational purpose. The views expressed and data provided here are by Equitypandit’s team. Kindly do not completely depend on the information provided as the risk appetite differs from individual to individual and there are various other factors in the market to determine the factors to invest in the market.