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5 Safe Investment Options for Conservative Investors in India

Safe investment options in India help conservative investors protect capital while earning steady returns with lower risk over the long term.

Written by : Knowledge Centre Team

2025-08-02

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8 minutes read

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Who doesn’t like steady growth of wealth and almost certain return on investments? However, investing in such saving plans is also necessary, even for the aggressive investors looking to growth in equity markets. If you have been looking for safe investments, you can have more than one advantage to your side with them. For instance, safe investments can help you with the following:

  • Safeguard the returns from riskier investments
  • Preserve the accumulated wealth against inflation and taxes
  • Help in tax-savings under section 80C
  • Help achieve extremely important goals with confidence

All of the investments we have included here will provide you tax benefits along with steady returns. Here are five long-term safe investment plans for you to consider for the steady growth of your wealth:

1. Guaranteed Savings Plans from Life-Insurers

Life insurance companies have always been the torchbearer of long-term safe investments. Guaranteed saving plans are one step ahead of any other long-term fixed return investments. Few of the major benefits these plans will offer you are:

  • Tax-saving on investment and tax-free maturity
  • Maturity value inclusive of guaranteed the sum assured + guaranteed yearly bonuses + guaranteed loyalty additions (for long-term investment commitment)
  • Goal protection option, where the plan pays all the due future premiums in case of the death of the policyholder, so that your family can still meet the goal.
  • Limited premium payment option, so that you invest for shorter-term while the money continues to grow for a longer-term.

Coming from life insurers the plan would be incomplete without the life cover benefit, which is inbuilt in the plan.

Also Read - Best Fixed Income Investment Options

2. National Saving Certificate (NSC) VIII-Issue

NSC has been popular investment option in India since inception. The fact that you don’t have to pay any tax till maturity, adds to that value. NSC VIII issue provides you with tax savings of up to Rs. 1.5 lakhs under section 80C. Other benefits of NSCs are as follows:

  • Safe investment of five years with guaranteed return
  • Tax-saving on investment and deferred tax-payments until maturity, (no TDS)
  • No maximum limit of investment
  • Certificates can be used as collateral for loans
     

You can build a regular income by investing Rs. 1.5 lakhs every year in NSCs for five years. Afterwards, you only need to reinvest the principle while using the interest as your income.

3. Unit Linked Insurance Plans (ULIPs)

Yes, you can also use Unit Linked Insurance Plans to park your funds for safe and steady growth, which can also be completely tax-free. ULIP plans have multiple unique features which will help you not only invest in safe options for long-term but also provide superior safety to your family.

ULIP Plan

Some of the prominent features of ULIP plans are:

  • Multiple investment options within a single ULIP. Invest in debt, equity, balanced and liquid funds
  • Automatic portfolio management option to manage your investment risk if you decide to allocate to equity
  • Goal protection option, where the insurer will invest the due premiums on your behalf in case of your early demise, so that your family can still meet their financial goal.
  • Tax-exempt investment up to Rs. 1.5 lakhs a year, plus tax-free maturity value
  • Option of partial withdrawal after five years. These withdrawals are also tax-free
  • You can also switch your funds between equity and debt fund options within the ULIP multiple times. The switch transactions are not taxable.

Only thing you need to take care of while investing in ULIPs is that your annual investment in the plan should never exceed 10% of the base sum assured.

For example, if the base sum assured or life cover of your ULIP policy is Rs. 20 lakhs, maximum you should invest in a year is Rs. 2 lakhs. This rule will apply to the policy throughout the investment tenure. The ULIPs maturity value will lose its tax-free status if you happen to invest more than 10% of the sum assured in any given policy year.

4. New Pension Scheme (NPS)

New pension scheme or national pension scheme has been another amazing investment option for safe investors. The scheme offers professional fund management with market-linked returns on fixed-income investments.

Although, the NPS Tier-I account is more popular due to its tax-exempt status, you can enjoy the same investment returns on Tier-II account as well. The investment had been introduced mainly for retirement savings and even offers an active portfolio management for retirement accounts investing in equity funds.

If you invest in NPS for your retirement (Tier-I account), you can enjoy an annual deduction of Rs. 2 lakhs under sections 80C and 80CCD(1B). However, the maximum deduction will be limited by 10% of your annual income (Basic + DA).

5. Public Provident Fund (PPF)

PPF has been the first retirement saving solution for the workers of the unorganised sector. PPF investment is completely tax-exempt. The investments up to Rs. 1.5 lakhs per annum and maturity value too. PPF also allows partial withdrawals after five years of investment.

Only drawback PPF has is that your annual investments are limited to Rs. 1.5 lakhs. So, even when your income has been growing and you want to invest more in PPF you cannot. However, the returns on PPF are guaranteed by the government of India, So, it is unbeatable when it comes to investment risk.

Must Read - NPV Meaning

Diversification is the Best Strategy:

Hope this list gives you an idea and helps you select the most suitable investment for your goals. However, it is always best to have a few long-term investments and not put all your money into one option. Even PPF interest rates keep changing due to market conditions.

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Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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