Amidst the fear of recession in the world, there is a fear of affecting investment in schemes related to market risk.
During recession, investors prefer to invest in safe options.
Bank FDs, PPF-NPS and investments in gold are considered risk-free.
New Delhi. Due to rising inflation and the continuous increase in interest rates to control it, the economy of many countries of the world is being affected and the fear of economic recession is deepening. Since the recession has a direct impact on the economy of the country, so investments in other asset classes including the stock market are affected. In such a situation, the question remains in the mind of common investors that where to invest in terms of security at this time.
Equity and real estate markets are badly affected during recession. So usually investors start withdrawing money from here and explore the possibility of investing in safe options. Let us know about those risk-free and fixed return options.
fixed deposit in bank
Bank FDs in India have been a safe and guaranteed return investment option since the beginning. Fixed deposits offer higher interest rates than regular savings accounts. Income tax exemption is also available on investing in a tax saving FD of 5 years. The specialty of bank FDs is that you get guaranteed returns over a stipulated period of time and are best suited for risk-averse investors. Apart from this, partial withdrawal and loan facility is also available on FD.
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Public Provident Fund (PPF)
Public Provident Fund is a government backed investment scheme. The current interest rate on PPF is 7.1 percent. The tenure of this scheme is 15 years and maximum one and a half lakh rupees can be invested every year. Like bank FDs, PPF offers a much higher rate of interest than a regular savings bank account.
PPF scheme is best for long term financial goals. Since its investment is not linked to the market, it gives assured returns. Apart from this, there is also a facility to extend this account in extended ie blocks of 5-5 years. In such a situation, you can continue it for 25 years instead of 15 years.
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National Pension Scheme (NPS)
Like PPF, NPS is also a government-backed retirement scheme. NPS is a mix of various investments like liquid funds, fixed deposits and corporate bonds. There are many schemes under NPS, you can choose according to your need. The rate of interest is also different in different funds.
The main feature of NPS is that the scheme is available to employees working in all sectors. The scheme offers tax exemption of up to Rs 2 lakh per year under the provisions of the Income Tax Act, 1961. The special thing is that 60 percent of the amount on maturity of NPS is tax free. Tax has to be paid only on 40% of the amount. The contribution limit in the NPS account of government employees is 14 per cent.
safe investment in gold
In India, investing in gold is considered the safest in every situation, as well as it is a traditional investment. The special thing is that investing in gold has never been a loss deal. Now apart from buying gold for investment, one can also invest in Gold ETFs and Sovereign Gold Bonds.
Fears of recession, weakness in dollar index, geo-political tension, after the improvement in gold prices from higher levels, many market experts are advising to buy in gold. An expert believes that at the end of the year, the price of gold can go up to Rs 52 thousand.
Tags: inflation, Investment and return, Recession
FIRST PUBLISHED : November 11, 2022, 10:40 IST