Safe Investments in India that Offer High Returns

When it comes to investing, everyone is looking for investments that offer high returns along with the protection of capital amount.

With the wide range of investment avenues in India you can choose from, it may become a tough call for you to choose one for your investment.

Choosing the best investment option depends on various aspects such as an investor’s financial goals, risk appetite, liquidity needs, and duration of the investment.

7 Safe Investment Options with Good Returns in India 2021

Let’s know about the safe investment avenues in India that offer good returns as well.

  1. Public Provident Fund (PPF)
  2. National Pension Scheme (NPS)
  3. National Savings Certificate (NSC)
  4. Gold
  5. GOI Savings Bonds
  6. Fixed Deposit (FD)
  7. Recurring Deposit (RD)

Public Provident Fund (PPF)

PPF is a popular, long-term investment scheme that offers stable returns and also ensures the safety of the principal amount. Being a government-backed scheme, investing in public provident fund is one of the safest investments in India. This investment comes with a lock-in period of 15 years, so you need to invest your money for this time duration. PPF investment offers a high rate of interest.

The current applicable rate of interest on PPF is 7.1% per annum.

Key Features of PPF:

  • Investment tenure of 15 years, which can further be extended for 5 years
  • Assured returns, as per the applicable rate of interest
  • Investing in PPF starts with a minimum amount of Rs 500 to a maximum of Rs 1.5 lakh in a financial year
  • Loan facility available from 3rd to 6th financial year
  • Partial withdrawals up to 50% of amount available in account. This option is available after completing 5 years of investment
  • Avail tax benefit under section 80C of Income Tax Act, 1961 for the investments you made in a financial yea
  • Interest earned is free from any tax deduction under section 10 of Income Tax Act

National Pension Scheme (NPS)

NPS is an investment plan for retirement backed by the government of India and regulated by PFRDA. Under NPS, your money is invested in various asset classes such as equities, debt securities, liquid funds, corporate bonds, government securities, etc. The rate of interest may differ, depending on your investment portfolio.

Key Features of NPS:

  • Employees working in any sector can avail this investment
  • Manage your portfolio through active or auto choice
  • Market-linked returns
  • Partial withdrawals (as per rules applicable) available up to 25% of the amount
  • Get tax deductions of up to Rs 2 lakh under section 80CCD of the IT Act

National Savings Certificate (NSC)

NSC is a government-backed fixed income investment scheme that offers guaranteed interest along with capital protection. Anyone can invest in National Savings Certificate to earn steady interest and save on taxes as well. This savings scheme is for individuals and best suitable for risk-averse investors.

The current applicable interest rate of NSC is 6.8% per annum, compounded annually and payable at maturity.

Key features of NSC:

  • Get NSC with the Post office and designated banks
  • 5-year investment tenure
  • Start investing from a minimum amount of Rs 100 with no maximum limit
  • Loan facility on NSC investment
  • Tax savings up to Rs 1.5 lakh annually under section 80C of IT Act

Kisan Vikas Patra (KVP)

Kisan Vikas Patra is a small savings government-backed scheme that offers a fixed interest rate to double your investment in just 124 months. You can purchase a KVP certificate from Indian post offices and select public sector banks.

The current applicable interest rate on KVP is 6.9% per annum.

Key features of KVP:

  • Guaranteed returns to double your investment
  • Choose from single holder, type A, & type B certificates
  • Start investing with the minimum of Rs 1,000
  • No maximum limit on investment


Investing in gold can be done by buying gold jewellery, coins and bars. In addition to possessing physical gold, you can make gold investments by investing in gold ETFs, gold mutual funds, and sovereign gold bonds. Gold investments usually offer liquid and profitable returns.

Key features of Gold:

  • Profitable investment with Inflation-beating returns
  • Highly liquid and safe investment
  • Inversly related to stocks market. High returns when stocks market falls

Fixed Deposit (FD)

A fixed Deposit is an investment that offers the guaranteed returns for the chosen term of the investment. It helps grow your savings with the safety of your invested amount. At the time of opening an FD, the prevailing rate of interest becomes applicable for the entire duration of the investment. Senior citizens can avail a slightly higher interest rate. Banks and Financial Institutions offer fixed deposits.

Key Features of FD:

  • Returns are assured and not related to market fluctuations
  • Most suitable to risk-averse investors
  • Tax is deducted from interest on fixed deposit, as per rules applicable under Income Tax Act
  • 5-years FD’s are eligible for tax benefit up to Rs 1.5 lakh in a financial year

Recurring Deposit (RD)

RD is one of the most popular low-risk investment options in India offering fixed returns on your investment. In RD, you can choose a fixed amount to invest each month. The interest rate is determined at the time of opening a RD and remains fixed during the tenure of investment.

Key features of RD:

  • Deposit tenure of 6 months to 10 years
  • Option to avail loan against recurring deposit
  • Facility to withdraw amount even before maturity. However, some amount is deducted towards a premature penalty
  • Higher interest rate than the interest earned in a savings account

Also Read: Guide to Investing for Beginners in India

Comparison of Top Safe Investments in India 2021

Investment Return Potential Risk Involved Suitable for
PPF High Nil Risk-averse investors
NPS High Medium All investors
Gold High Nil All investors
NSC Medium Nil All investors
KVP Medium Nil All investors
FD Low Nil Risk-averse investors
RD Low Nil Risk-averse investors


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