Fixed Income Investment, Types of investments offering fixed returns
Published On 26 Oct 2010 By
admin. Under:
Fixed Deposit.
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Are you among those who are looking for an investment that provides you fixed income to meet your expenses?
Are you among those who have a low risk appetite and looking for investments that provide fixed and assured returns?
If your answer to any of the above is yes, then take a look at the various Fixed Income Investment options available in India.
What is a Fixed Income Investment?
Fixed income investment refers to those investments which come with assured returns and low risk, infact very low risk.
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These investments are meant for those who have a low risk appetite, or for who are nearing their goal completion period and want to shift to safer investments. While fixed income investments are safe and the returns are assured, the returns are comparatively lesser than compared to higher risk investments such as stocks and mutual funds.
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Types of Investments which provide Fixed Returns/Income
The various types of fixed income investments are described as below:
- Fixed Deposits – These refer to deposits kept in banks for a fixed period of time. The interest rates are fixed for a certain period of time. Also the returns are assured. Learn more about Fixed Deposits.
- Company Fixed Deposits – While fixed deposits are with banks, company fixed deposits are deposits with companies. The interest rates earned vary from company to company and are comparatively higher than that of bank fixed deposits. However there are certain negative aspects of company fixed Deposits. Read more.
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- PPF – PPF or Public Provident Fund is another type of investment offering fixed returns. They provide assured returns of 8% which is tax free. Read more.
- EPF or Employee Provident Fund – It mainly serves a vehicle for retirement. Interest rate vary from 8 to 9.5%. Read about rules related to Employee Provident Fund withdrawal.
- Senior Citizen Savings Scheme – Any individual who is a resident Indian and aged 60 or above can invest in Senior Citizen Saving Scheme (SCSS). This scheme offers a fixed interest rate of 9%. Read more about Senior Citizen Savings Scheme.
Other types of fixed income investment include National Saving Certificates, Debt Funds and Fixed Income Mutual Funds.
Choosing the best fixed Income Investment option
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You might ask which is the best option for fixed income investment from those listed above.
Unfortunately there is no fixed answer for this. What’s best for you might not be best for someone else. e.g. A PPF offers tax free returns but lock in period is 15 years. So while it might seem to suit you, it might not suit someone else. Read about each of the options in detail and then decide which one suits u the best.
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