What is Low-Risk Investment?

Low-risk investment refers to investment in assets that have low probabilities of producing a loss. Although you can avoid experiencing losses with low-risk investments, you will also avoid high returns.

Examples of low-risk investments are treasury securities, corporate bonds, money market mutual funds, fixed annuities, preferred stocks, dividend-paying common stocks, and index funds.

List of Low-Risk Investment Options

Here are some low-risk investment options in India: 

Fixed Deposit

Fixed deposits, also known as FD, are always considered to be one of the safest forms of investment. They offer a fixed rate of interest for a predetermined period. If you are looking for a way to get stable 5-8% annual interest, FD is a good option.

Public Provident Fund

The Public Provident Fund (PPF) is a government-supported savings plan with favorable tax advantages and interest rates. Contributions to the PPF can be deducted, and interest collected is exempt from taxes.

Money Market Funds

Money Market Funds can be classified as short-term debt funds. They invest in different money market instruments and try to give good returns for up to one year and also preserve a high degree of liquidity. The average maturity of a Money Market Fund is one year.

What is Medium-Risk Investment?

These are investment securities that fall between high-risk and low-risk products. They offer greater returns than low-risk investments like fixed deposits and government bonds but lower risks than high-risk investments like stocks and bitcoins, among others.

List of Medium-Risk Investment Options

Here are some medium-risk investment options for you:

Balanced Mutual Fund

A Balanced Mutual Fund is among India’s most favorite mutual funds. Though it is subject to market risks, it can be the best investment for growing money multifold.

On the other hand, if you are more conservative but require higher returns, then you can consider a fixed-income mutual fund or a monthly systematic investment plan.

Debt Funds

Debt Funds are mutual funds that only invest in fixed-income instruments like bonds and treasury bills. These monthly income plans guarantee some locked-in money and not a complete wipeout. Therefore, they are relatively low-risk compared to high-risk investments.

Dividend-Paying Stocks

Dividend-paying stocks are one of the best forms of investing in the stock market. While they are not as sought after as high-yield bonds, dividend-paying stocks are useful for investors who want to earn a regular income on their investment.

What is High-Risk Investment?

As the name might suggest, a high-risk investment does not have a fixed return pegged to it. However, these are generally high-return investments in India because the returns on these investments are high if invested intelligently.

List of High-Risk Investment Options

Here are some high-risk investment options that you can opt for:

Direct Equities

Direct Equities are also one of the most suitable investments for the long term. It is an equity share of a company that has legal conditions that are associated with the ownership of the company.

When you purchase an equity share, you acquire a claim to participate in the management of the company. However, equities also suit a high rank when it comes to risk. You can start investing in direct Equities by opening an AMC free demat account to start purchasing and participating in companies management.

Equity Mutual Funds

Equity Mutual funds invest mainly in stocks. You can invest your money in these stocks through SIP, bit by bit, or in bulk.

FOREX Trading/Foreign Exchange

FOREX, or foreign exchange, is a market that connects buyers and sellers of foreign currencies at a given price. Therefore, foreign exchange trading can be defined as the exchange of one currency for another by individuals, companies, or banks.

When you start investing or trading in stocks, mutual funds, or foreign exchange, keep in mind that each investment type requires a suitable account. There are difference between demat and trading accounts, and each investment needs the appropriate one.

Bottom Line

These are just a few of the many investment options available in India. The best option for you will depend on your circumstances, such as time frame, ability to tolerate risk, and future goals. Before making any investment decisions, it is important to do your research or consult with a financial advisor if necessary.


Disclaimer: This blog is posted solely for educational purposes. The securities mentioned are examples and not recommendations. It is based on various secondary sources from the internet and is subject to change. Kindly consult an expert before making any related decisions.