Plus and minus points of various debt investment products and whom they will suit

Smaller banks offer better rates. However, weigh the risks before investing. While chasing higher returns, you should not ignore safety or tax implications. ET Wealth explores various debt products to help you choose the one most suitable.

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You must restrict investments only to AAA rated companies.
With banks slashing fixed deposit (FD) rates, investors are looking for alternatives.

However, while chasing higher returns, you should not ignore safety or tax implications.

ET Wealth explores various debt products to help you choose the one most suitable.


1. 5-year bank fixed deposits

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Caution: Smaller banks offer better rates. However, weigh the risks before investing.


2. Tax saving fixed deposits

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Caution: Smaller banks offer better rates. However, weigh the risks before investing.

3. 5-year company deposits

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Caution: Risk increases with smaller banks, but risks multiply with smaller and weaker companies. So, restrict investments only to AAA rated companies.

4. Senior Citizens’ Savings Scheme

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5. Sukanya Samriddhi Yojana

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6. Public Provident Fund

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7. National Savings Certificate (NSC)

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8. Voluntary Provident Fund

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9. Listed tax-free bonds

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10. RBI bonds

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11. Debt mutual funds

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12. Pradhan Mantri Vaya Vandana Yojana

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Note: Though a pension plan, this works like an FD; Invested amount returned after 10 years or at the death of insured.

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