Zero Risk Investments 2018: Invest 500 Monthly, Earn 280000 on Maturity

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Do you know that investing even a smaller amount every month for a certain period can grow your wealth substantially?

In this article, we’ll discuss about how your wealth will grow if you invest 500 every month in various zero investment products and the returns at the end of maturity.

Investment products can be classified broadly into two categories:

  • No risk or zero risk – This includes National Savings Certificate, Sukanya Samriddhi Yojana, Public Provident Fund, Fixed Deposit, etc.
  • Moderate to high risk – This includes mutual fund, stocks, corporate FDs, etc. Check out such high risk-high return investment products.

But for poor earning investors with no risk appetite, the best options to invest 500 per month are Sukanya Samriddhi, PPF, FD, NSC.

Public Provident Fund:

The target audiences for this favorite investment product of Indians are non-employed individuals. However anyone can contribute money to PPF which has a pre-fixed tenure of 15 years and current interest rate offered is 7.80% (October 2017-December2017) and the rates are revised every quarter. The minimum amount required to invest is also small i.e. Rs. 500 and maximum you can invest is Rs. 1, 50,000 if section 80C deduction benefit is the aim. Most importantly the entire interest earned is also exempt from tax.

So investing Rs. 500 monthly i.e. Rs. 6,000 per year @interest rate of 7.8% for a period of 15 years will fetch a return of Rs. 1, 72,000. The returns are 100% guaranteed (and you would never be at loss) although there would be fluctuations due to interest rate revision.

Sukanya Samriddhi Yojana:

Securing the future of girl child is the objective of this most loved investment product by the parents having daughters. The interest rate offered is 8.3%. Parents have to invest minimum Rs. 1000 yearly in Sukanya Samriddhi Account (SSA) for a period of 14 years. However the scheme matures after 21 years. So anyone investing Rs. 6000 every year will earn maturity sum of above Rs. 2, 80,000.

A investment of Rs. 1000 in SSA will yield a return of around Rs. 6 lakh. You can open account in SSA only for a girl child who is less than 10 years of age at the time of opening the account.

Fixed Deposit:

Another guaranteed return investment product is fixed deposit which can be opened with most of the banks in India such as ICICI, SBI, Axis, HDFC and others, government post offices and other financial institutions. Interest rates, tenure and minimum deposit differs with each bank. However the minimum deposit is greater than Rs. 500 for most of the banks. But bank like SBI requires a minimum amount of Rs. 500 and tenure of 5 years. So a monthly investment of INR 500 (i.e. Rs. 6,000 every year i.e. a total investment of Rs. 72,000) for a period of 5 years will give a return of above Rs. 99, 000.

National Savings Certificate:

Investor can buy NSC for a fixed amount of Rs. 100, 500, 1000, 5000 or 10000 and multiple certificates can be purchased. If someone buys Rs. 500 certificate then after 5 years the maturity value would be Rs. 733 @ an interest rate of 7.8%. The biggest advantage of NSC is that the interest rate is fixed, so investor knows the maturity amount he/she would be receiving.

Recurring Deposit:

This is another excellent no risk investment product especially when deposit amount is on a lower side. Investor needs to deposit minimum monthly amount which is typically Rs. 500. The interest rate and tenure varies with each financial institution. So a Rs. 500 monthly investment for a tenure of 2 years will yield return of Rs. 12984 at an interest of 7.5% compounded quarterly. Similar to NSC, the interest does not change periodically. So investor beforehand knows the maturity value.

Here’s the summary table showing returns from Rs. 500 monthly investment:

Investment ProductInvestment Tenure (Years)Current Interest RateTotal Invested AmountReturn Amount
Sukanya Samriddhi Yojana148.3%84000280000
Public Provident Fund157.8%72000172000
Fixed Deposit56.5%7200099000
Recurring Deposit27.5%1200012984
National Savings Certificate57.8%500733

Although the returns look smaller but for a poor income earning person, zero risk investment avenues are best recommended as their money is safe. Higher the sum invested, higher would be the returns. There are other no risk avenues as well, the returns from these five products are the best.

Remember it takes a disciplined approach to earn good return and reach your financial objective which could be child’s marriage or education, buying car or house, and others.

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