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Risk-free investment

Mutual funds can minimise the risks associated with debt, equity markets, they cannot completely eliminate them

I have just been handed over Rs 2 lakh as my provident fund from my earlier company. I would like to invest it in a safe and risk-free instrument but get good returns.
- Sudeshna

If you are looking for a safe and risk-free investment, then we suggest you go with a bank fixed deposit or a post office savings scheme. While the returns in mutual funds could surpass what you get there, they cannot be classified as 'safe and risk-free'. Mutual funds can minimise the debt or equity market specific risks to some extent, they cannot obliterate them altogether.

This article was originally published on July 20, 2010.

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