1. Fixed Income Instruments

Fixed income investments generate returns that can be a source of consistent income to meet daily expenses. Such investments help maintain a steady flow of income since they are unaffected by market fluctuations and provide guaranteed returns. 

Here are some fixed income investments you can look into: 

• Fixed Deposits

A Fixed Deposit (FD) is a guaranteed return investment plan that provides assured returns at a fixed rate of interest for a particular period of time. Based on how frequently you would like to receive your returns, you can either opt for a cumulative FD or a non-cumulative FD. Through a cumulative FD you will receive your interest returns at the end of your chosen tenure, whereas with a non-cumulative FD, you can plan your interest payouts as per your preference. 

• Public Provident Fund

Public Provident Funds (PPFs) are a good investment plan if you would like to invest for a longer term and save up on your taxes. PPFs are backed by the government and therefore safer to invest in if you have a lower risk appetite. They provide tax benefits on investments and ensure stable returns. 

• Senior Citizens Savings Scheme

A Senior Citizens Savings Scheme (SCSS) is specifically designed for people above the age of 60 to provide a substantial source of income after retirement. An SCSS provides tax benefits and is a secure form of investment that offers higher interest rates. 

• Government Bonds

Government Bonds are issued by the Reserve Bank of India to balance the fiscal deficit in the economy. These bonds are issued to raise funds for development of infrastructure and government spendings. Government bonds are long-term investment options that range from 5 to 40 years and have fixed interest rates. 

• Corporate Bonds

Corporate Bonds are issued by companies to raise capital and build a balanced portfolio. These bonds can be bought by investors at a predetermined interest rate. The interest payouts are paid to the investors at pre-established time intervals. Corporate bonds offered by high-rated companies are less likely to default on their payments, thus making them a safe and reliable source of fixed income.

2. Market-linked Investments

Market-linked Investments are directly tied with the fluctuations occurring in the market thereby making them risk-prone when compared to fixed income investments. However, they offer higher interest rates to compensate for the risks involved. Such investments can help you diversify your portfolio and enable the amassing of wealth. 

Given below are some market-linked investments for you to consider investing in: 

• Mutual Funds

Mutual Funds are financial instruments wherein the funds put together by stakeholders are invested in securities such as bonds, stocks and others. An investment adviser manages the funds and allocates them in various securities with an intent to generate gains and serve the best interest of the shareholders.There are different categories of mutual funds based on the investment objectives decided at inception. 

• Demat 

A Demat account or dematerialisation account is crucial if you wish to trade or invest in the stock market. This account acts as a reservoir for investments such as securities, bonds, mutual funds, shares, ETFs and others that you hold in electronic format. A Demat account helps you avoid the hassle of paperwork and maintains a record of your online investment seamlessly.

• National Pension Scheme (NPS)

Introduced by the Indian government, the National Pension Scheme encourages saving for retirement so as to have a regular source of income. NPS provides flexibility to venture into investing in assets like bonds, securities, equity and so on as per your convenience. It also offers tax benefits of up to ₹50,000 to both salaried as well as self-employed individuals under section 80CCD (1B).

• Sovereign Gold Bond (SGB)

Sovereign Gold Bonds are government securities substituted for physical gold. The price of these bonds are directly linked to the market value of gold. Such bonds are convenient since they help avoid additional costs such as making charges and the risk of storage that you would otherwise have to incur if you purchased gold. 

• Unit Linked Insurance Plans (ULIPs)

Unit Linked Insurance Plans provide dual benefits of life insurance coverage as well as market-associated investments. ULIPs use a part of the insurance premium to invest in the capital market as per your risk appetite. The income thus derived helps in capital appreciation while you benefit from an insurance cover.