Where To Invest For Fixed Returns?

Investing is a personal journey, and whatever suits you the best is the best strategy for you. However, there are some principles which is often suitable for most.

The principle is, ‘always invest some amount in a guaranteed return scheme’.

The reason is simple - when the markets fluctuate, and they will do so, you need a scheme that offers some fixed return to always keep your blood pressure in check. Also, once you grow older, you need more of that fixed return than the volatility in the market.

So what’s the best way to invest and where to invest in fixed returns? Let’s find out…

Fixed Deposit

It’s a simple bank deposit which you can keep for 6 months or above, and it provides a good return on your investment. But oftentimes, since it’s in a bank, you don’t get more than 6 or 7 per cent of your income. Considering inflation of 5 per cent every year and the tax which you pay on the interest generated, you are essentially just keeping your money safe and no growth.

Although this might sound discouraging, it’s a good plan if you have a very big corpus like 10 crore rupees, and your expenses are less than 30 lakhs INR annually, you can keep living your life amazingly well for eternity.

And for others, a fixed deposit is a good option to park their emergency funds.

Overnight Liquid Mutual Funds

The banks provide an insurance cover of only 5 lakhs. But if you have more money, one way is to have more bank accounts. But how many will you go on creating? The alternative is to have your money parked in liquid mutual funds.

It’s similar to a fixed deposit, but sometimes it can give you some minor return on your investment.

Public Provident Fund

This is a unique government scheme. You can invest 1.5 lakhs INR per year in the account, and you will get around 7.1 per cent. Now, this might not sound like a good return, but the interest earned is tax-free. Also, your investment gets some tax deductions. So, overall, it is a good investment plan too.

Always park some money in this scheme because this account is secured and can’t be broken to pay off anything which might happen to you, like bankruptcy and so on. In a nutshell, this money is safe for you.

Conclusion

It might be tempting to put all your money in an investment plan of varying risk, and that might seem like a good plan until it doesn’t.

Eventually, it will give good returns, but for many people, the constant ups and downs might not be a good thing for their health. So, only invest in what you can handle mentally, and the rest can be in varying fixed instruments.

Your goal isn’t to maximise your returns over your lifetime. It’s to have a good amount and always live good in the moment.

Your journey is yours to make and live. Don’t compare and live happily.