With the coronavirus pandemic hitting the economy hard, it is unlikely that the Reserve Bank of India will increase the interest rates anytime soon. This low interest rate regime is a boost to borrowers but it has come at a cost to depositors and investors, who are earning less‐than‐expected interest on their money parked in bank accounts. So, they are looking for investment options to move their money to earn better returns than, say a savings bank account or fixed deposit account, and at the same time avoid taking undue risks.
Here are a few investment options that may give you a better return in the present scenario.
Many consider mutual funds are risky because they are linked to the market. But it is also necessary to consider the higher returns they yield because they are market-linked. Mutual funds are a great option if you want to invest in the stock market, but do not have the required expertise to trade. In mutual funds, the return and risk both are directly proportional to the performance of the fund you are invested in.
2. Public Provident Fund
PPF is a government-backed long-term investment plan that allows risk-free investment. The interest rates are revised and paid by the government every quarter. The current interest rates are 7.10%, until September 30. The PPF account has a maturity period of 15 years. PPF contribution up to Rs 1.5 lakh per annum can be claimed for deduction under Section 80C of the Income Tax Act.
3. National Pension System
A social security initiative of the government, this scheme is open to public and private sector employees and even those from the unorganised sector. People have to invest in a pension account at regular intervals during their employment. After retirement, they can take out a certain percentage of the corpus and receive the remaining amount as a monthly pension.
Apart from being a financial asset, this precious metal also has emotional and social value in India. Also, some people prefer to invest in gold to avoid the complexity of market-linked instruments.
There are basically three ways in which you can invest in it:
a) You invest directly in physical gold.
b) Opt for sovereign bonds issued by the government.
c) Invest in gold exchange-traded funds (ETFs).