Top News

Nowadays, whenever someone comes into a lump sum, most people first choose a fixed deposit as an investment. While fixed deposits are a fairly safe option, their interest rates are no longer as profitable as they are in the face of inflation. This is why investors are now looking for options that offer higher returns with lower risk and keep their money safe for longer. However, many smart options are now available in the market, such as debt mutual funds, NSC, gold investments, KVP, or corporate FDs, which are proving to be superior to fixed deposits in terms of returns, liquidity, and tax benefits. So, you can choose the right option to grow your lump sum quickly.

Today, investors have access to some low-risk, robust money-making options that not only offer higher returns but also surpass FDs in terms of tax and liquidity. Here, we're going to list six of the best investment options that can outperform FDs, while also reducing risk.

Debt Mutual Funds: Better Returns at Lower Risk

Debt mutual funds are great for investors seeking safe returns.

These funds invest in government bonds, high-grade corporate bonds, and other fixed-income instruments.

Returns typically range from 6%–8.5%, which is higher than many FDs.

The money isn't locked up; you can withdraw it whenever needed.

Indexation benefits over the long term also reduce tax.

Corporate FDs: Higher Interest, But Choose the Right Company
Corporate FDs offer interest rates of 7.5%–9.5%, compared to bank FDs.
The condition is that the company must have an AAA credit rating to avoid the risk of default.
Senior citizens receive extra interest, and the tenure is flexible.
This is good for those who want slightly higher returns than FDs but don't want to take on too much risk.
NSC (National Savings Certificate): Safe and Tax-Friendly
The government-backed NSC is completely safe.
It offers 7.7% interest and a lock-in period of 5 years.
Interest is compounded annually and paid out in one go at maturity.
It also offers 80C tax benefits.
Simply put, it's a strong option with low risk.

Gold Investment: The Greatest Support Against Inflation
Gold always delivers strong returns over the long term, especially during times of inflation and market volatility.
These days, people are choosing these investment options instead of buying jewelry.
They don't require storage and offer transparent pricing.
It is recommended to keep 10–15% of the total portfolio in gold.

Lumpsum Equity Funds: Greater Wealth Creation in the Long Term
If the investment horizon is 5 years or more, equity mutual funds can deliver much higher returns than FDs.
History shows that equity funds have delivered returns of 12%–14%+.
Market risk remains, but fluctuations are smoothed over the long term.
This is the best option for young investors or those with long-term goals.

Kisan Vikas Patra (KVP): Guaranteed Double Returns
KVP is best for those who want a rule-based investment without any investment.
The interest rate is 7.5% and it doubles the money in 115 months.

Investing ₹1 lakh guarantees ₹2 lakh upon maturity.
This is a very safe option due to its government guarantee.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.