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.
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:
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.
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.
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.
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.
Here’s a list of 13 low risk high return investments in India in 2024:
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
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: ModerateJaipur Stock
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
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.New Delhi Investment
Level of Risk: Moderate
Potential returns: Low to moderate
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
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
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
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.Surat Investment
Level of Risk: Very low
Potential returns: Low to moderate
This is a low-risk bond that provides inflation adjusted returnsPune Investment. 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
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
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
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
*These are PPF interest rates for the last 25 years, i.e. since 1999-2024. [1]
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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
The things that low-risk investors should consider before making a decision are:
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.
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.
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.
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.
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.
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.
Investment is all about smart planningAhmedabad Stock. 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.
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.
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.
Low risk investment options include corporate bonds, bank FDs, savings accounts, ULIPs, PPF, gold, treasury bills, etc.
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.
You can choose to invest your funds in Low risk investments for short-term financial goals and to create emergency funds.
Factors that you need to consider when choosing a low risk investment option, include your risk appetite, financial goals, investment horizon and expected returns.
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.
Government Bonds, Gold Bonds, Gold Mutual funds, etc., are low risk investments that fetch the highest returns.
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.
Indore Investment
