In 2021, adopting a smart strategy is essential to make the most of the available investment options. For ensuring safety for your deposited capital, invest in fixed income instruments. However, some of the fixed income instruments apply only to senior citizens.
Also, some of them come with the option of periodic interest income, whereas others do not provide this alternative. Therefore, you should analyze the instruments carefully. Here are some instruments that can offer high returns in the Year 2021.
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PPF (Investment Option)
Public Provident Fund is an investment option offered by the government of India. It is a long-term investment alternative that allows you to invest up to Rs. 1,50,000 every financial year. The minimum amount that can be invested every year is Rs. 500.
The interest is calculated annually and will be paid only after maturity. If you are seeking a regular interest payout, it might not be a viable option for you.
National Savings Certificate (NSC)
National Savings Certificate is a fixed income instrument that can open by visiting any post office branch in India. It comes with a maturity period of 5 years and allows you to earn returns at a high-interest rate.
The interest earned for the first four years is reinvested, and they also come under the tax benefit offered under section 80C. Though the interest is calculated every year, it is paid only at maturity.
NPS
Invest in NPS instead of high-risk investments such as mutual funds and equities. Though NPS allocates some of your deposits into equities, the cap on equity allocation reduces the risk. You can expect a high return rate from the NPS. It also provides you with a monthly pension after retirement.
Fixed deposits
NPS does not offer easy liquidity that you can get with investments like FDs. Fixed deposits offer a flexible tenor and allow you to withdraw the investment prematurely.
However, bank fixed deposits do not offer the kind of interest rates they used to because of the reduction in repo rates and other policy changes adopted by RBI owing to the ailing economy. However, by investing your savings in corporate FDs, you can ensure steady growth for your deposits.
Currently, Bajaj Finance FD is offering the highest rate of interest in this segment. With an interest rate of up to 6.75%, you can reach your investment goals without any issues. To compare the returns offered by this investment avenue as compared to bank FDs and postal FDs, check the below example:
On investing Rs. 20,00,000 for 3 years in a bank FD, you will grow your deposits by 5%. On choosing the postal FDs, you will get slightly better interest rates at 5.5%. Bajaj Finance FD offers an attractive FD interest rate of 6.75% for a 3-year deposit as well. Analyze the difference in returns from the below table:
| Fixed Deposit | Investment Amount | Tenor | Interest rate | Interest capitalized at maturity | Returns |
| Bajaj Finance FD | Rs. 20,00,000 | 3 years | 6.75% | Rs. 4,32,953 | Rs. 24,32,953 |
| Bank FDs | Rs. 20,00,000 | 3 years | 5% | Rs. 3,21,509 | Rs. 23,21,509 |
| Postal FDs | Rs. 20,00,000 | 3 years | 5.5% | Rs. 3,56,136 | Rs. 23,56,136 |
The other factors that make it one of the best investment options in 2021 are listed below:
Online mode of investment
Bajaj Finance FD provides a mode of investment that is entirely online. Everything is online, from the online FD form to the online documentation facilitated by CKYC. FD providers check CKYC numbers to confirm your identity and address.
Also, easy online payment options through net banking and UPI and an online FD calculator that assists your financial decisions make it a seamless investment mode.
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You can accelerate your deposits at a 0.10% extra FD rate by choosing this online system. For senior citizens, the excess FD rate of 0.25% is applicable irrespective of the investment mode.
Contingency Fund
Bajaj Finance FD can be your contingency fund in times of distress. It is possible due to the collateral-free loans that you become eligible for on investing in this FD scheme. Also, you can liquidate your deposits anytime you want once they finish the lock-in period of 3 months.
Assured returns
The safety of your investments is guaranteed as Bajaj Finance FD provides fixed and assured returns. It can judge from the high credit ratings that premier credit rating organizations such as CRISIL and ICRA have given to this investment option.
Investments like NPS may generate high returns with minimum risks, but the liquidity offered by this pension scheme may not suit you. You can invest in Bajaj Finance FD as it is a safe investment option and ensures high returns.
Also, the collateral-free loans and flexible liquidity options make it one of the most attractive investment avenues in 2021. The safety and stability of Bajaj Finance FD can judge from the fact that CRISIL and ICRA have given it the highest credit ratings for being a stable and secure instrument.