For investors who want to invest in instruments that guarantee constant revenue and are characterised by minimal risk, making the right choices is essential. In a world where money is unpredictable, options that give definite returns are the surest ways of increasing your wealth. Plans that offer the best guaranteed return provide capital preservation and reliable, steady income growth over time, which is always attractive to risk-averse investors. Let us take a closer look at some of these options and why they exist as viable choices in the first place.
1. Guaranteed Return Plans
These are plans that come with the dual benefits of life insurance coverage and investment returns. The best part is that your principal amount typically remains secure, while the returns are risk-free and guaranteed, provided the insurer has a strong financial rating. You will generally know how much you will receive at maturity, free from market volatility and other unpredictable factors. These plans are ideal for achieving life goals like children’s higher education, retirement, or future savings.
Additionally, if you unfortunately pass away during the policy tenure, the insurance company will pay the fixed sum assured to your nominees. This ensures they can meet their financial needs without relying on others.
Such plans are perfect for individuals who would like to achieve two goals: provide for their families and grow their wealth. They shield investors from market risks and offer immunity from fluctuations. These plans also come with tax benefits, subject to the prevailing tax laws, on both premium payments and maturity amounts. You should compare policies across multiple insurers to choose the best guaranteed return plan that fits your requirements.
2. Fixed Deposits
Fixed Deposits (FDs) are good options for stable and fixed returns. The rate of interest and tenure are pre-defined. This gives you complete clarity on the amount you will receive at maturity. You can reinvest your returns or choose periodic payouts. But, opting for payouts means forgoing the benefits of compounding.
FDs are secure and helpful if you wish to lock in your capital for a certain period to meet future life goals. However, the returns are taxable as per your income tax slab.
3. Public Provident Fund (PPF)
Individuals looking for a government-backed, risk-free savings plan can consider the Public Provident Fund (PPF). It offers secure investment options along with tax benefits under Section 80C of the Income Tax Act. Contributions are capped at ₹1.5 lakh annually, and the interest earned is fully tax-exempt.
However, the scheme comes with a long lock-in period of 15 years, if you are looking for liquidity.
4. National Savings Certificates (NSC)
National Savings Certificates (NSCs) are another government-backed instrument offering assured returns based on the time horizon of the investment. The interest rates are fixed and reviewed quarterly by the government.
What Should You Choose?
While you can invest in a mix of FDs, NSCs, and allocate funds to PPF, it is wise to start with a guaranteed return plan. Such plans secure your family financially with life insurance coverage, which is unavailable in other options. This ensures peace of mind, knowing that your family will receive a lump sum if anything happens to you during the policy period.
Simultaneously, the returns are risk-free while your initial capital remains safe. With compounding, you can build wealth steadily for the future. Ensure you compare plans and providers carefully to select one that aligns with your financial goals.
