The last few months have seen share prices fall like nine pins, interest rates on fixed deposits collapse and even moratorium being placed on withdrawals of a particular bank.
At such times, it is very important to look for safety and here are 4 investments that are safe and offer good returns.
1. National Savings Certificate
The National Savings Certificate (NSC) offers investors an interest rate of 6.8 per cent on their deposits, payable annually. This is much better than bank deposits, which are currently offering interest rates of 5.5 to 6 per cent, across tenures.
The NSC also offers tax benefits under Sec 80C of the Income Tax Act. A sum of Rs 1,000 grows to Rs 1389.49 after 5-years. It's important to remember that the interest income is fully taxable and is not tax exempt. The NSC certificates can be transferred from one person to another. While there maybe many instruments that offer slightly higher interest rates, this investment being backed by the Government of India is very safe.
2. Bajaj Finance Fixed Deposits
The deposits of Bajaj Finance are AAA rated and hence offer good safety. The NBFC has recently reduced the interest rates on its fixed deposits. Currently, for a period of 24 to 35 months, one gets an interest rate of 7.65 per cent. The interest rate on 36 to 47 months is 7.70 per cent and the interest rates on 48 to 60 months is 7.75 per cent.
Senior citizens are entitled to an extra interest rate of 0.25 per cent. It's important to note that in case the interest amount exceeds Rs 5,000, there would be a TDS that is applicable. It is advisable to place money for the short term only, just in case interest rates rise over the next few months.
3. Kissan Vikas Patra
The Kissan Vikas Patra can be purchased from any of the post offices. The interest rate currently offered is 6.9 per cent. Tax benefit is available under SEC80C of the Income Tax Act. The amount that is invested doubles in 10 years & 4 months. However, one need not invest in the Kissan Vikas Patra for such a long period, as the certificates can be encashed even after 2 and half years from the date of issue.
There is a nomination facility that is available and the KVP will be issued in the form of a passbook. The certificates of the KVP can be transferred from one person to the other.
4. KTDFC Fixed Deposits
KTDFC is owned by the Government of Kerala and fixed deposits repayment to the tune of Rs 4,500 crores are guaranteed by the Government of Kerala.
A 1, 2 and 3 year deposit fetches an interest rate of 8 per cent, which in present times is not bad at all. Senior citizens are entitled to an extra 0.25 per cent, taking their interest rates to 8.25 per cent.
The deposits attract a TDS if the interest amount exceeds Rs 5,000. The deposits are extremely safe, given that they are backed by the Government of Kerala. The interest rates are also very good.