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Apr 16
conservative investor

Investment Options for Conservative Investors

Wondering what kind of investor you are and where you should invest? Let’s help you figure this out! Do you monitor your account daily? Look at a long-term time frame? Hate the idea of losing too much money? Are drawn towards stocks that exhibit the least volatility? If the answer is yes, you are a conservative investor who believes in taking calculated risks. However, before we talk about your investment options, let’s learn little about conservative investors.

What is a conservative investor?

Conservative investors like to play it safe. They are happy with fairly modest returns and usually consider financial instruments with a track record of paying steady dividends.  Sure, they like to churn out profits but not at the cost of jeopardizing the principal amount.

Basically, this category is extremely protective about their investment and tends to gravitate towards holdings that don’t fluctuate much in value. Thanks to a prudent approach, conservative investors are able to withstand the market storms with ease. They do not bear the brunt of an economic recession, nor make explosive gains in a booming market.

There are a variety of options available for conservative investors. The best course of action would be to enlist the help of professional investment management services to ensure you are choosing a product that fits your financial goals and risk profile to perfection.

Recurring Deposits:

This systematic saving avenue that allows you to deposit a fixed amount on a monthly basis is a great investment option for salaried people. The account can be opened in a post office or bank by cash/cheque for anywhere between 6 months to 10 years.  It interest rate earned is similar to Fixed Deposits (FDs). Facility of taking out a loan against the deposit is available.

Debt Mutual Funds:

Given that they have no exposure in the equity market, debt mutual funds ensure your principal is secure. While the interest rate is not fixed and depends on performance, you can expect returns on the line of FDs.  Also, there is no maturity level. Further, you can dabble in a large variety of schemes like long & short-term funds, income funds, corporate bonds, debt securities, liquid funds and more.

Public Provident Fund (PPF): 

Backed by the government, this 15 year scheme which can be extended is great for building a nice corpus for retirement. PPF offers many perks. You can open the account with Rs.500 and deposit a maximum of Rs.1.5 lakh in one financial year. Not to mention, you can enjoy tax benefits under Sec 80C. The interest (currently 7.6%) is compounded yearly.  There is provision for partial withdrawals and securing loans.

Sukanya Samriddhi Yojana (SSY):

The small saving initiative started by the government is aimed at the education/marriage of the girl child. The account can be opened at post offices and nationalised banks with a minimum deposit of Rs.1, 000 which can be increased to Rs.1.5 lakh in a financial year. You are also eligible for tax benefits under Sec 80C.  The only catch is the long-term tenure (21years). The interest rate is currently 8.1 percent per annum but keeps changing frequently.

Apart from the above, you can explore avenues like Bank Fixed Deposits (FDs), Kisan Vikas Patra, Corporate Deposits, Senior Citizen Savings Schemes, PSU Bonds, and National Savings Certificates etc. If confused and want expert advice, approach a reliable firm offering investment advisory services. Armed with vast knowledge and in-depth experience in the domain they can help you pick some winners!

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