Top 6 Low Risk Investment Options in India

Investment is a commonly discussed term when it comes to financial planning. People always think about the return they can expect from an investment and the risk involved with it. Due to the risk factor, many people stay away or delay their investment journey. With the recent volatility in the stock market in the past year, it is very important for everyone to plan their investment carefully. Since there are many ways to invest our money, in this article we will discuss the top 6 low risk investment options in India.

Fixed Deposits (FD)

FDs are one of the safe investments and most common investment choices of many investors. Due to fixed return, low risk, and tenor flexibility, this is one of the popular investment options. The rate of returns can vary depending on the tenor, financial institutions, etc. A senior citizen may get a slightly higher rate of return as per the bank’s terms and conditions.

The risk level is very low as the returns are guaranteed by the banks or NBFCs. Hence it’s very important to check the financial institution’s background and T&C carefully before investing.

Public Provident Fund (PPF)

Another low-risk long-term investment option is PPF, which is backed by the Government of India. Usually, PPF comes with a lock-in period of 15 years; however, it also has a partial withdrawal with a few conditions. Along with the high returns and no risk tag, it also offers tax-saving features. The interest earned on PPF is tax-free.

The interest rate of PPF is decided by the GOI and revised every quarter. As per Q3’2022 the interest rate of PPF is 7.1%.

National Pension Scheme (NPS)

NPS is a long-term retirement savings plan introduced by the Government of India. The NPS interest rate can be between 8 and 12%, and it has zero risk as it is backed by the GOI. Any Indian citizen or NRI between the ages of 18 and 65 can open an NPS account. The NPS account has some withdrawal restrictions, and one should regularly invest in it until the age of 60.

Debt Mutual Funds

Debt mutual funds invest in debt instruments such as corporate and government bonds, debentures, money market instruments, etc. It is also referred to as “debt funds” or “bond funds.” Because the aforementioned debt instruments generate a fixed income, the returns are more stable when compared to other types of investment in the market. Debt funds are also tax-efficient due to indexation benefits.

Must Read: How to invest in Mutual Funds for Beginners in India?

Senior Citizen Savings Scheme (SCSS)

As the name suggests, this investment is especially for Indian citizens above 60 years of age. Few benefits of SCSS as per below

  • Premature withdrawal is allowed with a minimal fee
  • Tax benefits up to INR 1.5 lakh per financial year under section 80C
  • It’s a govt scheme, hence very low risk
  • The scheme has a tenor of 5 years and the account can be opened at the post office or bank


Gold is a popular investment option for traditional investors. Due to its stable market price, the risk is low and the popularity of the precious metal ensures continuous value appreciation. Also, there are various ways to invest in gold such as gold jewelry, gold bars, gold coins, gold ETFs, Sovereign Gold Bonds (SGB), digital golds, etc. If anyone doesn’t want to keep physical gold they can always opt for gold ETFs, Sovereign Gold Bonds (SGB), digital golds, etc.

Must Read: Sovereign Gold Bond (SGB) in Groww App Detailed Information 

These are a few investment options with very low risk, but not the complete list. Your job will be to find suitable investment options as per your financial plan.

The best way to choose the right investment plan depends on your short/long-term financial goals and your risk appetite. Along with that, one should also check the liquidity of an investment, which means when and how fast it can be converted to cash (for any emergency need or upcoming plans). One should review all these criteria and make an investment plan to avoid any risk.

Also, one should check the tax benefits provided with any investment plan which can save a lot of money and increase profit.

Different platforms providing investment options or the investment instrument itself can charge various fees. It is recommended to go through all their fees and charges along with the company policy.

FAQ on low risk investment options

Does FD give monthly interest?

Yes, you can choose any of the interest payout options provided by the financial institution. Usually, you can select the option between annually, semi-annually, quarterly, monthly, or at maturity.

Is NPS a good investment?

NPS can be considered a good long-term investment or retirement plan. However, if you have a short-term goal such as marriage, further education, a vehicle, a home, etc., then you will have to look for a different investment option.

Is it good to invest in debt mutual funds?

Debt mutual fund investments have very low risk and a steady return. Debt mutual funds are also tax-efficient.

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