Five Low-Risk Investments Schemes Right Now | HDFC Pension

5 Investment Schemes for The Low-Risk Investor

Returns from NPS - National Pension System

When choosing the best investment option in India, many people feel overwhelmed as they have many questions in their minds. Whether you are a first-time investor or experienced, you may have to invest your hard-earned money in schemes that offer valuable returns with minimal risk involved, right?

Well, to decide which investment scheme is the ‘best,’ you must determine the following things:

  • What is the purpose of investment? Are you investing to achieve a specific goal or to get financial security?
  • What is your risk appetite? i.e., how much risk are you willing to take?
  • What is your liquidity needs? Do you have enough cash/savings for urgent requirements?
  • What is the investment period you are looking at?

Once you know the answers to the above questions, you can choose the suitable investment scheme accordingly. But there are a few popular low-risk investment schemes that are suitable for all.


NPS (National Pension System)

NPS is one of the best long-term investment options backed by the Government of India. It helps you build a corpus in the long run and secure your post-retirement life. In NPS, you voluntarily contribute a small amount to the NPS account during your working years and draw a pension after you retire.

NPS is regulated by PFRDA (Pension Fund Regulatory Development Authority of India). It gives you exposure to investing in several money market instruments and investment schemes as per your preference.

One of the significant features of NPS is that professional fund managers manage your investments. Also, it offers two options – active and auto investment. In the auto investment option, the funds are invested automatically in according to your age bracket, whereas, in the active option, you can choose your investment strategy as per your risk appetite.

NPS has a lock-in period, maturing only after the investor turns 60. So, the sooner you invest in NPS, the better, as you have a longer time to build a huge corpus. Another significant benefit of NPS is that you can enjoy tax benefits of up to Rs. 2 lakhs in a year under different sections of the Indian Income Tax Act.


PPF (Public Provident Fund)

PPF is another popular government-backed investment scheme. It has a mandatory lock-in period of 15 years, and it is considered one of the safest investments. PPF offers a higher interest rate than savings bank accounts like bank fixed deposits.

It is best suited for your long-term financial goals. And, since the investment is not market-linked, it offers assured returns over time. Upon maturity, you can withdraw the entire corpus in a lump sum or extend the investment in a block of five years.


Non-equity Mutual Funds

Non-equity mutual fund schemes like debt funds, hybrid funds and GILT funds carry lesser risk and offer capital protection. These mutual funds invest primarily in secure assets like government bonds, gold bonds, fixed securities, debentures, commercial papers, etc.

Such funds give the flexibility to choose the investment horizon; it can be short-term, mid-term or long-term to suit your investment objectives. Although non-equity funds do not guarantee 100% risk-free returns, the associated risk is much lower than equity-oriented funds.



Indians are known to have a fascination for gold, i.e., the yellow metal. People in India have been investing in buying physical gold or gold jewelry for a long time. Today, however, you can invest in other forms of gold like gold ETS (Exchange Traded Funds) and sovereign gold bonds.

Since the prices of gold are inversely related to stocks, investments in gold can act as a hedge against inflation and market fall. Also, since the price of gold does not fall significantly, the risk is minimal as you get capital protection.

Apart from Gold ETFs, you can also consider investing in G-Sec bonds. You can start your investments in such bonds with an investment as low as Rs. 1000 and get a fixed annual interest of 7.75%.


Bank FDs (Fixed Deposits)

Bank FDs are a traditional investment option in India as they are safe and offer much higher interest than a savings account. If you are a senior citizen, you can expect even better returns from your investments in FD.

FDs have a lock-in period, making it an ideal investment choice for your mid-term and long-term goals. Since you get assured returns at a fixed interest rate, it carries no risk, and you can be assured that your capital is safe. FDs also allow partial withdrawal and loans against your balance during an emergency.

Now that you know of the different low-risk investment schemes in India, you can choose to invest in any or all of them to accomplish your long-term goals. But, NPS is a must-have in your portfolio as it helps you be financially independent during your old age and get regular income even after you hang your boots. To know more about NPS or open an NPS account, visit the HDFC Pension Funds website.



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