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Low-Risk Investment Options Offering High Returns in India 2024

Low-Risk Investment Options Offering High Returns in India for FY 2023-24
January 29, 2024


In this policy, the investment risks in the investment portfolio is borne by the policyholder.

Low risk high-return investments are preferred whether the investor is new or professional in the investment field. They belong to the cautious group who wish to get the benefit of growth while protecting their money from potential loss. 

Though capital loss can be prevented in low-risk investments, limitation in returns is the price you pay. However, with diversification, low risk investments can help if you are looking for savings to accomplish goals within close range, like repaying a mortgage loan. 

How To Get The Highest Returns At The Lowest Risk?

Following specific investment strategies that can fetch the highest returns at the lowest risk. Some of the tried and tested strategies for low risk high return investments are:


A diverse portfolio, i.e., investing in different assets, is the best way to mitigate the risk in market-related investments. The loss, if any, in one asset can be neutralised by the higher returns from another asset.


Before deciding between long-term investment options with high returns or short-term investment options with stable returns, you should be able to assess your risk tolerance. Risk tolerance is the extent of loss in investments that you can handle.

Investment Horizon

The timeline given for any investment plan to earn returns is the investment horizon. It could be a few years to decades. The investment horizon again depends on your financial goals. Interest compounds exponentially, so high-yield accounts will generally be long-term investments.

Research and Expert Advice

If you are a beginner in investment and find it confusing to understand market trends, seek professional advice before deciding on an investment option. If you can comprehend the investment options, conduct thorough research for an informed decision.

Best Low-Risk Investments With High Returns

The two components of investment are risk and returns. While low-risk investment options offer low returns, they are better short-term investments and can be savings for emergency funds. However, investors generally look for low risk high return investments. 

If you are skeptical about such an option, you need not be. Several low-risk investments provide high returns, and they are:

1. High-Interest Savings Account

Savings accounts may not be low risk high return investments, but with competitive interest rates, they are best suited for investors who are averse to risk. look for a bank with higher rates of interest for a savings account before opening a savings account. Though the returns are not as high as other investment options, it is one of the low risk investment options in India. The advantage is accessibility to funds whenever you are in need. It can be a short-term investment for emergency funds.

2. Annuities

Annuity is an ideal investment option for retirement planning. Individuals with low-risk appetites can go for this option. You either pay regular or single premiums for a fixed annuity instrument and get a guaranteed income after retirement or a specific period.  Annuity is among the low risk high return investments suitable for salaried persons as regular premium payment options at monthly, quarterly, half-yearly, and yearly intervals are provided. 

3. Money Market Mutual Fund

Money Market Funds are among the low risk high return investments and are suitable for persons with low-risk tolerance. They are mutual funds managed by professional fund managers who invest prudently to generate higher returns. This suits investors who prefer short to mid-term investments.

4. Municipal Bonds

Municipal bonds are funds collected by State and local governments from investors for funding projects like roads, bridges, etc. The bonds are issued for periods between 2 to 30 years. The local government promises to pay interest regularly for the funds invested. Municipal bonds are considered low risk high return investments. Municipal bonds are of two types, i.e., General Obligation Bonds that are considered low-yield bonds as assets and Revenue Bonds that do not back them are considered high-yield bonds as they are backed by a revenue stream tied to the project being funded. The interest earned on the municipal bonds is tax-free.

5. Certificate of Deposits

Certificates of deposits are deposits issued by banks and other financial institutions for a fixed period for a fixed interest. These deposits are at zero risk as DICGC or the District Insurance and Credit Guarantee Corporation covers investments up to Rs. 5.00 lakhs. Banks normally issue a short-term CD i.e., between 7 days to 1 year, whereas financial institutions issue CDs for periods between 1 year to 3 years. Investments in short-term CDs backed by DICGC insurance cover are considered low risk high return investments. 

6. Debt-focused Unit Linked Insurance Plans (ULIPs)

ULIP is a preferred investment option as it provides the dual benefit of insurance and savings. There are two components in Debt ULIPs which are categorised as low risk high return investments option. The components are the investment component and the insurance component. Debt ULIPs invest a part of the premium in safe investments like debt instruments like corporate and government bonds, and the rest is for life cover. These instruments provide steady long-term returns and tax benefits under Section 80C.

7. Treasury Bills

Treasury bills are short-term debt instruments issued by the Government of India. Treasury bills are issued at a discounted rate. The bills will be redeemed at the face value. The returns will differ between the face value and the discounted rate. No interest will be paid for the investment. These are short-term investments with a timeline ranging from 91 days to 364 days. These low risk high return instruments are reliable investments with guaranteed returns. 

8. Fixed Deposits

Investors with a low-risk appetite generally prefer fixed deposits issued by banks. The deposits are issued for a tenure between 7 days and 10 years at a fixed interest rate, and you can choose the tenure to align with your financial goals. The returns are guaranteed. The interest rates are higher than the savings account and are among the low risk high return investments. These can also be excellent choice as one time investment plans.

9. Series I Savings Bonds

Series I Savings Bonds offer interest at both fixed rates and rates adjusted twice a year to beat inflation. You can stay invested in the bond for 30 years with an option to encash earlier. Being a long-term investment option with interest at variable inflation, series I saving bonds areamong the low risk investment options in India.

10. Corporate Bonds

Public and private corporations issue Corporate Bonds to raise capital for investment in infrastructure or for expanding the business. It is a debt obligation for which the Company pays interest half yearly on the investment. With a choice of credit quality, maturities, and yields combined with capital protection, corporate bonds are one of the best low-risk investment optionsin India.

11. Preferred Stocks

Preferred stocks are company shares, and dividends are extended to the investors. Preferred shareholders, though have partial ownership in the company, do not have voting rights. Preferred stocks are suitable low risk high return investments option for those who have a low-risk appetite but intend to get a regular income. 

12. PPF (Public Provident Fund)

PPF is one of the best low risk high return investments where you stay invested for a term as long as 15 years with an option to extend for a further five years. This kind of investment plans ideal for people who prefer investing in instalments. An investment of up to Rs. 1.50 lacs in a financial year in PPF is permitted with an EEE tax benefit, i.e., the principal, interest, and maturity proceeds are tax-free.

13. Gold

Investment in gold is by far the best low risk high return investments. Gold, over the years, has been considered a hedge against inflation, with its value soaring high with time. 

What To Consider For The Low-Risk Investors?

The things that low-risk investors should consider before making a decision are:

Financial Goals

Know your financial goals before you dive into investments. Draw a financial plan and assess your risk tolerance level. All assets are not money-making assets. Some level of risk is involved in every asset. Seek expert advice for more clarity between savings and investment options for an informed decision.

Assess Your Risk-taking Comfort Zone

Every investment option has some degree of associated risk. Be very cautious when investing in stocks, mutual funds, or bonds, as they are not as safe as investing in deposits at banks with FDIC insurance. Stocks, mutual funds, or bonds are securities where you either get good returns or lose some or all the money invested.

For financial goals with long time horizons, investing in instruments with greater risk like stocks, mutual funds, etc. Investing in low-risk instruments like cash securities is a good option for short-term financial goals. Solely investing in cash securities is not considered a hedge against inflation. A mix of low and high-risk investments is regarded as smart investment.

Create An Emergency Fund

A smart investment strategy is to put aside a minimum of 6 months’ income in a savings product where the funds are easily accessible during emergencies or if the regular income stops.

Clear High-Interest Debts

Debtis carrying high interest, like personal loans, credit card dues, etc., can impact your savings. Pay off the debts as early as possible; this can be the best investment strategy with low risk and high returns. 

Review Your Portfolio At Regular Intervals

With fluctuating market conditions, it is advisable to review your portfolio regularly and do some reshuffling if necessary. Professional investors identify the risk weightage of an asset in advance. Reviewing will help balance your portfolio when the weightage goes up or down over and above the risk weightage assessed in advance.

Trust Reliable Sources Only

Do not get lured by investment opportunities that sound legitimate. Seek information from unbiased sources before investing in such products. You may fall prey to scams by investing in these opportunities with information that comes from unreliable sources. 


Investment is all about smart planning. High-risk instruments can turn out to be high-return investments if you stay invested for longer periods. Individuals with low-risk appetites prefer low risk high return investments. With an array of low-risk, high-return options available, you can align your investments as per your financial goals, risk appetite, and time horizons for a robust financial future. 

FAQs on Low risk investment options

Q. What is low-risk investing?

Low-risk investing is investing in instruments with minimal losses while you get sufficient returns. Some of the low risk high return investments include fixed deposits, fixed annuities, money market mutual funds, corporate bonds, etc.

Q. What is the safest investment with the highest return?

The safest investment with the highest returns is where interest is compounded exponentially, and your money grows rapidly. The products you invest in turn out to be low risk high return investments if the time horizons given are longer. 

Q. When should you buy low-risk investments?

You can choose to invest your funds in Low risk investments for short-term financial goals and to create emergency funds.

Q. What are the advantages of investing in a fixed deposit?

The advantage of a fixed deposit is your principal is safe while you get good returns in comparison to an investment in a savings account. Also, you have the option of availing of a loan when you need emergency funds instead of preclosing the deposit. This is considered one of the best low risk investment options in India.             

Q. Which investment gives the highest return?

Government Bonds, Gold Bonds, Gold Mutual funds, etc., are low risk investments that fetch the highest returns.

Q. Are there high-yield, low-risk investment options?

Yes. There is an array of high-yield, low risk investment options in India like Fixed Deposits, Annuity, PPF, Municipal Bonds, Money Market Mutual Funds, Treasury Funds, etc.

ARN - ED/02/24/9205

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Author Profile Written By:
Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

# Subject to conditions specified u/s 80C of the Income tax Act, 1961.

# The afore stated views are based on the current Income-tax law. Also, the customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.

The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year.

Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.