Do you get anxious with the mere thought of market volatility? Well, fret not. You are not alone. Investing in stocks has always been accompanied by some level of risks. And not everyone has the stomach to bear the volatile and unpredictable markets. This is why financial experts always advise investors to understand their risk profile and then choose the right type of investment for their investment portfolio. Several investors prefer safe investment options to park their money. If you are one such investor, you have come at the right place. In this article, we will explore different types of investment that are ideal for risk-averse investor such as yourself.
Investment options for risk-averse investors
Following is a list of few investment options which is ideal for risk-averse investors:
- Debt funds
Debt funds are a type of mutual funds that invest their assets in fixed-income securities such as call money, commercial paper (CP), treasury bills (T-bills), corporate bonds, etc. These investment options are ideal for investors who do not wish to settle with extremely low returns offered by traditional investment options, and at the same time do not wish to expose their portfolio to too much risk. - Bank Fixed Deposit (FD)
One of the safest investment options in India, several investors choose to invest in bank fixed deposits as they provide assured returns to investors. Also, there are almost zero instances of a bank defaulting on a fixed deposit. Another reason is they offer higher returns than most savings investments. Investments in FD are also eligible for a tax deduction of up to Rs 1.5 lac per annum. - Public Provident Fund (PPF)
Offered by the government of India, PPF schemes are one of the most common savings-cum-investment among retail investors. The interest rates on these savings schemes are revised by the central government regular every quarter. Considered to be one of the safest investment options, PPF schemes offer tax deduction of up to Rs 1.5 lac to investors under section 80C of the IT Act, 1961. However, before investing in PPF schemes, one should be wary of the mandatory 15 years lock-in period associated with these investments. Just like bank FDs, PPF schemes also have the potential to offer a higher rate of interest than traditional savings scheme. - National Savings Certificate (NSC)
Backed by the government of India, NSC schemes offer guaranteed and assured returns to its investors. No wonder they are deemed to be one of the safest investment options available to investors. To invest in NSC scheme, you simply have to create an NSC account at any post office in India. As NSC schemes are one of the investments under Section 80C, they also provide tax benefits of up to Rs 1.5 lac to investors. - Gold
Investors have been investing in gold since time immemorial. Investors invest in different types of gold – gold coins, gold bars, gold bullions, gold jewellery, etc. However, did you know that you do not need to have physical gold to invest in gold. You can invest in intangible gold assets in the form of gold funds or gold ETFs (exchange traded funds).
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