Top 7 fixed-income investments in India

Wish for assured earnings on your investments? Here’s a list that promises fixed returns at a low risk.

7 Most bankable fixed-income investments in India

Fixed-income investments are agnostic of market conditions, so they effectively diversify your portfolio and ensure a steady return. Every sound investment strategy has a strategic place for fixed-income investments as they safeguard investors’ capital and maintain a steady inflow of income. 

Let’s take a look at the various fixed income investment options available to leverage for a stronger and safer investment portfolio. 

Related: 5 Ways to start investments even if you don't have money right now

Public Provident Fund

Backed by the Government, PPF’s competitive interest rates and tax exemption facilities make it one of the most popular saving schemes. The maximum investment amount is Rs 1.5 lakh annually, and since PPFs fall under the Exempt, Exempt, Exempt (EEE) tax basket, the contribution; the interest accrued; and the maturity are all exempt from tax. Although the investment duration for PPF is 15 years, you can extend the investment deadline in slabs of 5 years. 

Related: Comparison of PPF and life insurance: Which comes first?

Listed PSU bonds

If you’re looking for a fixed investment option that’s backed by government entities and come with low default risk, PSU (Public Sector Undertaking) bonds should be your go-to choice. Plus, with benefits such as tax-free interest (certain bonds) and no age limit on investment, PSUs are perfect for investors who are in the lower tax bracket and want some steady extra money.

Related: PM Modi announces ‘Rs 1 crore loan in 59 minutes’ scheme for MSMEs

Sukanya Samriddhi Yojana (SSY)

Want to save a little for your daughter’s higher education? The Sukanya Samriddhi Yojana, initially launched as part of the ‘Beti Bachao Beti Padhao’ campaign, is a fantastic fixed-investment option to empower the girl child. With an attractive rate of interest (currently 8.1%), tax benefits, and a low minimum deposit amount of Rs 250, the scheme can be availed of anytime from the birth of a girl child till such time she turns 10. The maturity period of the account is 21 years from the opening date. Up to 50% of the deposit amount can be prematurely withdrawn once the girl turns 18.

Related: New Govt rule slashes minimum annual deposit of Sukanya Samriddhi account to Rs 250

Senior Citizen Savings Scheme

It’s never too late to start investing. The Senior Citizen Savings Scheme enables investors who are 60+ (55+ in case of early retirees) and who hail from a lower tax bracket to enjoy a regular inflow of income. With the maximum investment limit set at Rs 15 lakh, the investment time frame is initially 5 years, but can be extended by another 3 years. 

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The PMVVY, implemented through the Life Insurance Corporation of India (LIC), is a brilliant scheme for the elderly (60+ years) to counter the effect of economic conditions on the income from their interest. The scheme creates a safety blanket in old age with its assurance of a continuous pension based on a guaranteed interest rate of 8% p.a. for 10 years.

Related: 7 Government schemes to aid economic development and financial stability that you can benefit from

Debt Mutual Funds

This is a safer bet for investors looking at regular returns. Debt Mutual Funds are less risky as funds are invested in government securities, corporate bonds, commercial paper, treasury bills, and other securities that generate a fixed interest, unlike the volatile stock market.

RBI taxable bonds
Conservative investors looking for a safer government-backed fixed-income investment will find it profitable to invest in RBI taxable bonds at 7.75 % savings (taxable) bonds. The proof of investment is via a Certificate of Holding and the investment duration is 7 years.

*Return on investment (ROI) mentioned above are subject to change.

Whether you’re new to the investment landscape, more comfortable with safer investments, or simply looking to diversify your portfolio, fixed-income investments are an essential investment vehicle for investors of all ages.

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.


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