Best Short Term and Risk Free Investment Options

Is investment important for a seamless financial future? When to start investments? Should we plan our finances in the early 20s? Will my money be safe if I invest in schemes? 

We understand that making this decision would be difficult and confusing as there are n number of schemes and plans today. Each one of them has its pros and cons.

Investment is a very important decision involving your hard-earned money. You can have stress-free financial freedom in retirement. 

Here we have curated a list of the TOP 10 investment options in India-2023, and you will also find the best investment schemes for short-term goals and risk-free options available in the market.

Kisan Vikas Patra

  • This account can be opened at any post office. All Indian citizens are eligible to open an account.
  • The interest rate is 7.5% of the compound annually. The returns doubled in the 7th and 9th financial years. 
  • A minimum of INR 1000 is required, and there is no upper limit on the investment. Multiple accounts can be opened under the same citizen. 
  • It will mature in 10 years(it might vary every financial year). 
  • Premature withdrawal can be made between 2 years and 6 months.
  • It is a risk-free, short-term investment option with nontaxable returns.

Checkout the Free Kisan Vikas Patra Calculator

Government Bonds

  • The Indian Government introduces it to encourage investors to participate in the sovereign bond market.
  • A Demat account can be used to hold the government bond. Both the state and central governments provide these bonds. 
  • The bonds can be bought through the Stock exchange. The current yield of government Bonds is 7.244%.
  • The lock-in period purely depends on the type of Scheme, which might vary from 1 year to a few years. 
  • This low-risk to no-risk investment option is the best short-term investment.

Recurring deposits.

  • Recurring deposits have a minimum lock-in period of one month. 
  • The tenure starts from 3 months to 10 years.
  • The interest rates are usually 6% to 7% per annum, which depends on the bank’s policies.
  • This scheme benefits the monthly income-based people ready to invest money for better returns.

National pension scheme

  • It was established in 2004, regulated by the Ministry of Finance under the pension fund regulatory and development authority. 
  • This Scheme was introduced to aid defined contributions to retirees and extend old age security coverage to all Indian citizens.
  • All citizens, including non-resident citizens, can participate in this plan. The minimum investment amount is INR 500, and no upper limit. 
  • Premature withdrawal is 20% of the money that can be withdrawn before age 60. If the pension total is below INR 5,00,000, the total amount can be withdrawn before the lock-in period.
  • NPS tier 1 accounts are exempted from Tax. But for NPS tier 2 accounts, Taxes are applicable as per the Tax slab. This is a Risk-free investment plan.

PPF (Public Provident Fund)

  • It was introduced in 1968 by the National Savings Institute of Ministry and Finance. 
  • It is one of the best risk free investment options available in India.
  • It aimed to produce reasonable and standard returns on the investments. It is a risk-free investment option as the Indian Government backs it.
  • All Indian residents of any age can open a PPC account, which sanctions tax-free investment returns. 
  • A minimum of INR 500 is required to open and keep the account active. The account holder can invest a maximum of INR 1.5 lakhs annually. The return rate is currently at 7.1%(subject to fluctuations). 

Equity Mutual Funds

  • These mutual funds invest in stocks through a pool of investors headed by a financial expert to generate high to medium investment returns. 
  • The limit of investments varies for every stock; the average minimum investment would be INR 1000 to no upper limit.
  • There is no fixed lock-in period, which may depend on the stock. Few stocks have a lock-in period of 3-5 years.
  • The returns are exponential when it comes to Equity mutual funds. There are times when the return was 117% of the investment. 
  • It bears a medium to high risk, and the investment returns are taxable for gains above INR 1 lakhs for a financial year—the Tax ranges between 4% and 10%.

Direct Equity

  • This investment enables you to hold a share of companies directly through the stock market.
  • To invest in Direct Equity, a demat account is mandatory. The returns are invariably high.
  • The investor must acquire complete knowledge of the stocks before investing, as the returns and risks are subject to changes.
  • Direct Equity entails high risk, which can be easily eliminated through thoroughly understanding the company’s stock history. 
  • The investment limit can be as low as INR 50 to No Upper Limit. There is no maturity period for Direct Equity.

Real Estate Investment Trust

  • This Scheme allows investors to invest in real estate without owning the property. 
  • A pool of investors together purchase and manage income-generating assets such as shopping complexes, office buildings or hotels. 
  • The risk is minimized as the funds are diversified for investment in various locations and sectors. 
  • The investments range from a minimum of INR 10,000 to INR 15,000 with no upper limit.
  • There is no lock-in period for the investments. Generally, returns (dividends) of 8% to 10% are generated annually.

National Savings Certificate

  • It is a fixed 5/10-year savings bond backed by the Indian Government to encourage small-scale investments.
  • It is the best risk free investment options.
  • This plan can be bought at any post office in India, and every resident of India is eligible to open an NSC account.
  • An initial investment of INR 1000 is required, and there is no upper limit.
  • The return rate is at 7.00%(subject to fluctuations).
  • Nontaxable for an investment of INR 1.5 Lakhs. Tax is applicable on the final interest settlement as per the tax slab.


Investing is the best option to make your money work effectively to build a wealthy backdrop. The Government encourages citizens to invest. Choosing the correct plan is important. The primary objective is to calculate any scheme choice’s risk factor, return rates, and lock-in period. This article has given a few insights about the top preferred investment options. 

7 Eagles Founder Ashkar Gomez

Ashkar Gomez

Ashkar Gomez has rich experience in financial planning, management, Risk analysis in the equity and debt market. They completely advise on Value Investing.