Which is the safest investment option with higher returns than FDs?

After fixed deposits, which is the safest place to park money with complete surety and slightly better gains?
- Kawan Jain

If you are a senior citizen, you have options like Senior Citizen Saving Scheme (SCSS), Pradhan Mantri Vaya Vandana Yojana (PMVVY), and Post Office Monthly Income Scheme (POMIS). These are the safest investments as they carry a sovereign guarantee. After that, a notch below, you will have to look at short-duration debt funds with no allocation to lower-rated bonds.

If you are relatively young and this is going to be your long-term investment, allocate some amount to equity. If you don't take any risk, you will not have any meaningful gain.

My worry for risk-averse investors is that even if you see the value of your money growing, the actual worth may have reduced on an inflation-adjusted basis. So if your money grows less than the inflation, your money has gone down, even though optically it might look that it has gone up.

So take some measured risk with a small part of your money and do it with a long-term orientation. But it requires careful judgment in terms of what your needs are.

This article was originally published on September 15, 2021.