The risks to the economy are rising and even bank deposits are no longer safe. We saw a crisis emerging at Yes Bank and now investors are getting a little worried with the smaller banks. In times like these, it is best to play it safe. Here are 5 instruments that are very safe to invest:
1. National Savings Certificate (NSC)
The National Savings Certificate is a post office scheme and backed by the Government of India. But, that is not the only reason to invest during economic chaos. The interest rate of 7.9 per cent, makes it one of the best in its category. State Bank of India is offering at best an interest rate of just 6 per cent on its fixed deposits.
NSC also offers you the benefit of SC80C, where the tax benefit is available on a maximum investment of Rs 1.5 lakhs. This is a good scheme, which is safe and also offers good returns. A sum of Rs 1000 invested grows to Rs 1462.54 after 5-years.
2. KTDFC Fixed deposits
KTDFC is a government of Kerala owned entity and hence the deposits are guaranteed by the Government of Kerala. In fact, repayment of deposits worth Rs 4,500 crores along with interest is guaranteed by the state government.
A 1-year deposit at the institution fetches an interest rate of 7.5 per cent, while a 2 and 3-year deposit also fetches an interest rate of 7.5 per cent. This is not bad at all and is much better than the interest rates offered by most banks in the country. Company fixed deposits are subject to a TDS, if the amount of interest income exceeds Rs 5,000.
3. Post Office Time Deposit Account
This again is a post office scheme and is hence very safe. A 1, 2 and 3 year deposit fetches an interest rate of 6.9 per cent. There are also reports that small savings interest rates could be cut by the government. So, it's best to invest now, so that one is able to avail a better and higher rate. The account can be transferred from one post office to the other and any number of accounts can be opened.
4. LIC Housing Finance Fixed Deposits
LIC Housing Finance is backed by LIC and hence the deposits are safe. The interest rate offered on the deposits are 7.50 per cent for a period of 1 year and also 7.5 per cent on a 18-month deposit.
If you are looking to a 3 and 5 year deposit, the interest rate of 7.6 per cent, which is not bad at all.