If you have a sum of Rs 1 lakhs to Rs 2 lakhs or even more, here are some of the best places to invest them. However, you need to first know whether you are a risk averse investor or willing to take risk. Assuming you are unwilling to take risk, we are not recommending too many equity related instruments. Here are 5 other best places to invest Rs 1 lakh to Rs 2 lakhs.
IDFC First Bank Deposits
If you are looking at investing for a period of 2-years, IDFC First Bank Deposits are not a bad bet. The 2-year deposit offers an interest of 8.5 per cent, which is probably the highest among large commercial banks in India.
Interest on a similar tenure for senior citizens is 9 per cent, which is not bad at all. The RBI is set to cut interest rates and against this backdrop, an interest rate of 8.50 per cent is not bad at all. Most government owned banks are offering an interest around 7.5 per cent. It is important to note that bank deposits are subject to a TDS, if the interest income exceeds Rs 10,000 per year.
TN Power Finance
TN Power Finance Corporation offers an interest rate of 8.25 per cent on its cumulative scheme, while senior citizens are entitled to an interest rate of 8.75 per cent. These are for deposits of 36, 48 and 60 months.
The deposits are from a state government owned enterprise and hence are relatively safe.
Individual investors can look for other tenures as well, however, the interest rates here are likely to be much lower. The only hitch here might be that you may have to directly apply with the company and no brokers maybe involved. The ideal way would be to send the forms to the company and remit through NEFT.
Mahindra Finance FD
If you are looking at a AAA rated FDs, then you might want to consider Mahindra Finance FDs, which offer an interest rate of 9 per cent for a 33 and 40 month tenure. Investors should look to apply online, or else, if you do physically you would receive an interest rate of 8.85 per cent only.
Since the FDs are backed by a strong group and solid AAA rating, they can be considered as relatively safe.
In case, your interest income is over Rs 10,000 and you are not in the taxable income bracket, you might want to submit FORM 15G or Form 15H, as the case maybe.
Post Office Time Deposits
Post Office Time Deposits may not offer the best interest when compared to others, but they are extremely safe. A 5-year deposit offers you an interest rate of 7.7 per cent on a 5-year deposit.
The deposits qualify for tax benefits under SEC80C of the Income Tax Act. This means the post tax yields are even higher for individual investors. Nomination facility is also available and investors can transfer from one account to the other. However, there maybe no online processes and the hopes are that the service rendered would be good. All and said and done they are extremely safe, given that they are backed by the Government of India.
If you are young and willing to take a risk, you might want to bet on mutual funds. You can invest in equity mutual funds through lumpsum or gradually invest small amounts every month. You can do so by way of small SIP investment of Rs 500 every month. However, there is always an element of risk and investors should be careful before investing.