Government Investment Schemes for The Low-Risk Investor

Who doesn’t want to grow their money safely and steadily? The fear of losing money in market-linked investments probably ranks among the biggest fears people have. While taking risks can be rewarding, not everyone has the same appetite for it.However, there are several ‘safer options’ that you can consider. If low risks and modest returns satisfy you, then government-backed investment options are ideal for you. Here are seven government investment options for you:

If you want to reduce your risks to almost zero, you can easily opt for fixed deposits in a nationalized bank or post office.They offer various interest rates at different periods and you can invest any amount to get a fixed return upon maturity. It is the safest investment option which has been tried and tested regularly for ages now.

It is one of the most popular investment options for low-risk investors. In PPF, you can invest money ranging from Rs. 500 to 1.5 lakh in a financial year for a period of maximum 15 years.The Government of India fixes the interest rate of PPF every quarter. The most attractive feature of PPF is that your entire investment amount along with the interest earned and the maturity amount is totally tax-free.

These are issued by national governments to finance its borrowings. They are generally very reliable because they are risk-free and have high market ratings.The different types of government securities include treasury notes, capital indexed bonds, floating rate bonds etc.

Gold has always been regarded as a safe option for ages. Instead of buying physical gold, you can purchase sovereign gold bonds issued by the government.Though returns from SGBs are market-linked, the government has fixed interest rate of 2.50% on investment.

As an Indian citizen, you can purchase a National Savings Certificate (NSC) from any post office for a minimum Rs.100. There is no maximum investment limit.It will offer you a fixed return and carries virtually no risk since it is backed by the Government of India.

It is a scheme in which you can contribute towards your retirement. The money which you’ll invest in NPS is managed by pension fund managers registered with the Pension Fund Regulatory and Development Authority of India (PFRDA) in various funds.Upon maturity, while 40% of the corpus is used to buy annuity, the rest 60% can be withdrawn as lump sum. The entire amount withdrawn as lump sum is tax-free.

POMIS is a safe investment option offered by post offices, where you can invest a minimum amount of Rs.1, 500 and maximum Rs.4.5 lakh.The government fixes the interest rate that you can directly transfer into your savings account every month.You can opt from any of these schemes that best aligns with your needs.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.