There are many options, where you can invest a sum of Rs 1 to Rs 2 lakhs. However, if you are looking at safety, then we advise that you should stay away from stocks and equity mutual funds. Here are a few options that you could consider, to invest the amount with high safety.
Mahindra Finance FDs
If you invest online in the Mahindra Finance FDs, you get an interest rate of 8.75 per cent. There are no other AAA rated companies that offer you such a high interest.
Remember, this option is only for online investors and you have two options including 33 and 40 months for these deposits.
The yield on the 33 month deposit works to 9.46 per cent per annum and on the 36 month deposit it works to around 9.71 per cent. The company also has other tenures like 30 months, where again the interest rate is a very decent 8.50 per cent.
The interest rates are a good one per cent over and above what banks are offering and hence one can consider these.
Bajaj Finance FDs
Bajaj Finance FDs are also AAA rated and come with high level of safety. The NBFC company offers an interest rate of 8.40 per cent, which can go as high as 8.75 per cent for senior citizens. There is also a special tenure FD of 1 year, where the interest rate is 7.85 per cent. For this special tenure the minimum amount is Rs 1 lakh, while for all other schemes the minimum amount is Rs 25,000.
These deposits from Bajaj Finance are not a bad option. Please do remember that interest amount of Rs 5,000 and above attracts a TDS. So, invest accordingly.
This is fast emerging as a top private sector banking player. RBL Bank now offers an interest rate of 7.75 per cent per annum on a 12 to 24 months deposit, where the yield translates to 7.98 per cent.
So, if you are looking at a tenure that is less than two years, this is a good option. In the case of banks, a TDS is deducted, if the interest amount exceeds Rs 10,000 or so.
Go for these deposits, but, do not invest in long term tenures, given that interest rates could be headed higher in the coming days.
This government of Kerala backed entity offers an interest rate of 8.25 per cent on 1, 2 and 3 year deposits. The interest rate on tenures of 4 and 5 years falls to 8 per cent.
Senior citizens are entitled to an extra 0.25 per cent. These are extremely safe deposits, as the amounts, including principal and interest are backed by the government of Kerala. However, one may have to courier the forms, as one cannot find agents that handle this fixed deposit.
We suggest that you do not place money for the long term as we expect interest rates in the economy to rise. Remember, if your annual income does not exceed Rs 2.5 lakhs, you can submit form 15G/15H as the case maybe.