Bank Fixed Deposits (FD)
Fixed Deposit or FD is the most preferred investment option today. It yields up to 8.5% annual return depends on the Bank and period. Minimum period is 15 days and maximum is 5 years and above. Senior citizens get special interest rates for Fixed Deposits. This is considered to be a safe investment because all banks operated under the guidelines of Reserve Bank of India.
National Saving Certificate (NSC)
NSC is backed by Govt. of India so it is a safe investment method. Lock in period is 6 years. Minimum amount is Rs100 and no upper limit. You get 8% interest calculated twice a year. NSC comes under Section 80C so you will get an income tax deduction up to Rs 1,00,000. From FY 2005-'06 onwards interest accrued on NSC is taxable.
Public Provident Fund (PPF)
PPF is another form of investment backed by Govt. of India. Minimum amount is Rs500 and maximum is Rs70,000 in a financial year. A PPF account can be opened in a head post office, GPO and selected branches of nationalized banks. PPF also comes under Section 80C so individuals could avail income tax deduction up to Rs 1,00,000. Lock in period for PPF is 15 years and interest rate is 8%. Unlike NSC, PPF interest rate is calculated annually. Both PPF and NSC considered to be best investment option as it is backed by Government of India.
Investing in share market is another investment option to get more returns. But share market investment is volatile to market conditions. Before investing you should have a thorough knowledge about its operation.
Mutual Fund companies collect money from investors and invest in share market. Investing in mutual funds is also subject to market risks but return is good.
There are many investment options available like investing in Gold, Real Estate etc.
Investment in Gold