Fixed Income Instruments that women can Invest in

Among several financial instruments that can help women achieve financial independence, the ones offering fixed returns stand out because of their simplicity and the peace of mind they deliver. Irrespective of your employment status, you can easily invest a small sum at your convenience with a small sum.

Read to know more about such investment avenues that can help you accumulate a corpus for different life goals seamlessly.

Public Provident Fund (PPF)

Easily available in post offices and banks, PPF is one of the most prudent financial tools at your disposal. It is one of the rare instruments that enjoys an EEE (Exempt, Exempt, Exempt) status. It means that the contributions made, interest earned and the maturity amount are tax-free. You can contribute up to ₹1.5 lakh in a financial year in your PPF account.

The government fixes the rate of interest every quarter. You can easily open a PPF account in your nearest post office or bank by providing a few primary KYC documents. However, PPFs have a 15-year lock-in period which means that you can’t withdraw the entire money until it matures completely from the investment date.

Having said that, partial withdrawals are allowed that are subject to certain conditions. The lock-in period is there so that your money gets more time to grow.

Bank Fixed Deposit

The good-old bank fixed deposit is one of the most tried and tested investment tools in several Indian households. A bank FD is a simple product that pays an assured rate of interest. Today, many banks offer FDs exclusively for women that offer a higher rate of interest.

Just walk into your bank’s branch, fill up the form and get the certificate mentioning the principal amount, rate of interest, tenure and maturity amount on the same day. You can also easily book an FD online through mobile banking, especially during these times with just a few taps and clicks from the comfort of your home.

While the interest from FDs is taxable, they are one of the safest investment avenues where you can park your money to address goals like building an emergency fund, saving for a vacation or making down payments for your car or house.

Kisan Vikas Patra

Another fixed-income instrument you can buy is Kisan Vikas Patra from your nearest post office. Offering guaranteed returns, it’s a safe mode of investment where your capital is protected from market fluctuations.

The tenure for Kisan Vikas Patra is of 124 months and at the end of the tenure, you will get the principal amount along with the gains. The lock-in period is of 30 months and you can buy Kisan Vikas Patra in denominations of ₹1,000, ₹5,000, ₹10,000 and ₹50,000. Not only does it provide assured returns, but you can also use it as collateral for loans.

National Savings Certificate

National Savings Certificate (NSC) is a government-backed initiative that can easily be opened from any post office. It offers guaranteed interest and complete capital protection, the tenure of this certificate is of 5 years.

Also, note that investments under NSC qualify for tax deduction under Section 80C of the Income Tax Act, 1961. You can invest a sum in NSC as small as ₹100 while there is no maximum limit. In NSC, the interest gets compounded annually and reinvested. Also, no tax is deducted at source (TDS) and NSC certificates are accepted as collateral for loans.

Senior Citizens Savings Scheme

If you are a senior citizen looking for guaranteed income, the Senior Citizens Savings Scheme (SCSS) is a viable option. The scheme offers quarterly payment of interest, and as it is backed by the government of India, there’s a sovereign guarantee.

You can invest in this scheme either individually or jointly with your spouse in any bank or post office. An investment of up to ₹15 lakh can be made in multiples of ₹1,000. You need to provide your basic KYC documents. The tenure of the scheme is 5 years and you can extend it by 3 more years. Premature withdrawals are allowed after one year of opening the account.

As evident, all the instruments mentioned above offer capital safety and guaranteed returns. If you have a low-risk appetite and want to keep your money safe from eroding due to market fluctuations, then you can invest your money in any of them.