Where to invest for “risk free” returns if I do not want to save tax ?

POSTED BY Investdude ON January 6, 2014 2:48 pm COMMENTS (7)


I would like to invest around 4L as cash in multiple things, but wanted to be in safer side, not willing to take risk, because I have quit my job and joined my NGO. Can you please suggest the same?

PS: Not much worried about tax savings, as I am not in that bracket with my present job.

Thank you in advance!


7 replies on this article “Where to invest for “risk free” returns if I do not want to save tax ?”

  1. ashalanshu says:

    Dear Investdude, what are these multiple things you are looking as of now for your investment choices?



  2. rahul123 says:

    Hi Sumit,

    One can not ignore equity as an asset class for investment. But it is not suitable for everybody. Having a faith in Indian economy is good but if you see the corporate governance of many of the listed companies, they are not very good at it.

    When i was working in stockbroking firm in 2006-07, there was euphoria about India growth story. Analyst were telling retail investors to participate.I do remember, there was a poster stating ” which one will achieve 21000 first – sachin/ gold/sensex). After 5 years the market is still at same level (I Agree some of the stocks performed very well, but many good stocks are down by more than 70% from their life high)

    Like India, similar thing happened in Japan. Look at the level of Nikkei, from around 38,000 (1989) the index is at around 16000 (2014). Why can’t this happen to indian stock market? You might not get positive returns in India stock market in 2023.

    One should invest in stock market when they don’t require it (mean if they are ready to take 100% loss).


  3. rahul123 says:


    Why are you advising him to invest in MF’s?

    There is no guarantee of returns in stock market linked product. Long term investment will (always) generate good returns is a myth.


    Please put your money in FD in any good nationalized bank. Don’t even get fooled by “long term”,”only option to beat inflation” theory of pro market gurus.


    1. Sumit says:


      As you can see that I have mentioned first fixed income products like – FD, PPF, NSC, Post Office Time Deposit Scheme, Senior Citizens Saving Scheme etc for “risk free” return. And then told my preference and asked to give it a thought about mutual funds/equity.
      BUt when you say “Long term mf/equity investment good returns is a myth or not to be fooled by “long term”,only option to beat inflation” , then I definitely have different opinion.
      Pick any past 10 year terms, equity return ALWAYS beaten any fixed income products (and inflation) quite comfortably. Equity is bound to provide better returns in long term, but you have to be patient.
      One can still understand if you are about 50-60 years old, and want capital protection, but If you are young Indian, and not investing in equity you are loosing opportunities. After 10 years you will feel lot more poorer if you dont invest in equity. 10 years FD with 10-30% tax deducted return will get you nothing.


      1. rahul123 says:


        I don’t understand the rationale of your advise. The person has clearly stated that he dont want to take any risk. We can argue on your theory of investment in equity. Let me ask you few questions, please aswer them honestly

        1. Can anybody get guaranteed returns in stock market?
        2. As per the disclaimer of MF companies, “past performance is irrelevant”
        3. Why do you expect that same returns can be obtained in next 10 years
        4. Why young one should invest in equity?
        5. what is the “loss of opportunity”, if somebody dont invest in equity?
        6. What is long term?
        7. If MF doen’t perform then, goal of beating inflation will not be achieved and you might accentuate the effect of inflation.

        My concern is why are you mis advising somebody to invest in MF. Please ddon’t misguide.


        1. Sumit says:

          Dear Rahul I am bad in arguments, and so dont want to do that. But just want to clarify my points for 1 more time here.
          As I have stated earlier that I have advised him first the fixed income products since he asked about complete risk free product. And then I only suggested what I would do, if I were him.

          Now I am being completely honest, and rather than answering your question 1 by 1, I will summaries as below.

          Yes, You are 100% correct.
          Yes. “past performance is irrelevant”, And I am not expecting the same returns in next 10 years.

          But my point is equity is business, business is bound to grow. India is a young country; good businesses are only going to expand in longer term (say 10 years), if we can ignore the short term volatility and maintain systematic investment. Some one said – India will still grow even if the whole nation will sleep. It’s very depressing that Indian share-market is manipulated by Foreigners and they are earning million from here, whereas retail (our) participation is so rare. It’s very disappointing that Foreigners have faith in Indian share market, but we Indian’s do not have.

          We only talk about uncertainties, Yes it is uncertain but look how much difference you could have made if you have invested in sensex, or in any index fund from 2001 -2010, or pick any past 10 years period.
          Hope we can control the blunder happened in 2008, but still after that such bloodbath good businesses grown quite comfortably, and beaten fixed income product significantly.

          One can continue the debate, and talk about uncertainties for next 10 years as well but then on 2023, when equity return will be significantly higher than fixed income products, again he will be talking about the uncertainties for next 10 years. That is called loss of opportunity.


  4. Sumit says:


    Would I be in your place, for any long term goal (more than 7/8 years), I would definitely keep equity in my portfolio, may be by hybrid/balanced mutual funds(mix of equity and debt , it suits for a conservative investor who wants the growth of equity and stability of debt).

    But since you mentioned about “risk free” you have only fixed income products as options such as – FD, PPF, NSC, Post Office Time Deposit Scheme, Senior Citizens Saving Scheme etc.
    Real State also could be an option, but that requires more money, and also it is very illiquid and may involve other risks as well.

    I would say, if you are thinking about long term give it a thought about mutual funds (Indexed funds, large- cap, multi-cap or balanced, other conservative hybrid funds, ). Nobody can call is risk free, but in any 10 year terms, it always beaten any fixed income products.


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