Remember how people invest their savings in fixed deposits for that safety of returns? Then whether the market is falling or volatile, fixed deposit investors do not worry about their investments because they are promised a guaranteed sum of money after a specific duration.

Just like fixed deposits, there are other investment avenues too which give you guaranteed returns. These avenues are called fixed income investment avenues or fixed income instruments where the interest rate is guaranteed and independent of market movements.

Let’s have a look at some popular fixed income instruments –

 

Fixed income instrument Salient features
Bank FDs ·        The most common and popular fixed income instrument

·        You can decide on the amount of deposit and the deposit tenure

·        Interest is fixed over the tenure and can be availed as incomes during the tenure or in lump sum on maturity

·        5-year FDs are eligible for tax deduction under Section 80C up to Rs.1.5 lakhs
Corporate FDs ·        Like bank FDs but are offered by NBFCs (Non-Banking Financial Companies)

·        Offer a higher rate of interest than banks

·        Are a little risky since they are not under the ambit of RBI regulations
Senior Citizen Saving Schemes (SCSS) ·        Available for individuals aged 60 years and above, i.e. senior citizens

·        The minimum amount to opt for this scheme is Rs.1000

·        Maximum amount of investment is Rs.15 lakhs or the retirement corpus that you receive, whichever is lower

·        The tenure of deposit is 5 years which can be extended by 3 years

·        Interest rate for the quarter July-September 2020 is 7.40%

·        Investment into the scheme earns deductions under Section 80C up to Rs.1.5 lakhs
Public Provident Fund (PPF) ·        Investments into PPF are eligible for deduction under Section 80C up to Rs.1.5 lakhs

·        The investment tenure is 15 years

·        Interest rate for the quarter July-September 2020 is 7.10%

·        The minimum amount of deposit is Rs.500 and the maximum is Rs.1.5 lakhs

·        One deposit in a financial year is a must to keep the account active and to avoid penalties
SukanyaSamriddhiYojana (SSY) ·        A deposit scheme for the female child

·        Interest rate for the quarter July-September 2020 is 7.60%

·        The minimum deposit which should be done every year is Rs.1000

·        Deposits into the scheme are eligible for deduction under Section 80C up to Rs.1.5 lakhs

You can invest into any of these schemes if you want to avoid risks and get guaranteed returns. Moreover, for a debt component in your financial portfolio, these schemes are a good choice.