What are Fixed Income Investment Schemes?

What are Fixed Income Investment Schemes?

Last Updated on March 12, 2024 by admin

Did you know that there are investment tools that can give you a fixed income? If you did not know about it – you would want to, because they can help you big time. Most times, we would want a source of income to rely on even while not working or just as another stream of assistance. The same would stand in terms of a fixed-income investment. These schemes can play a vital role when it comes to a source that you can rely on. Let’s talk more about Fixed Income Investment Schemes in this article, shall we? But before that – let’s set a foundation with the basics straight.

What Does a Fixed Income Investment Mean – Fixed Income Investments Explained

Fixed income investing focuses on capital preservation and income generation. Government and corporate bonds, CDs, and money market funds are typical investments. Fixed income can provide a consistent income source with less risk than stocks. Here are some more of the best fixed-income investments for you.

Some of the Best Fixed Income Investment Schemes For You

These are the most stable and secure sources you can apply for. Here is a list of fixed income investment schemes that you would want to try out:

1) PPF

A Public Provident Fund is one of the most famous long-term investment programs backed by the Indian government. It offers competitive interest rates that are also tax-free. The investment period is 15 years, with the opportunity to extend it in five-year increments. Interest is exempt from taxation under Section 80C of the Internal Revenue Code. The maximum annual investment amount is INR 1.5 lakh. If you are in it for the long term, this investment will suit your goals and be the best financial source for your retirement life.

2) NSC

Post offices have played a critical part in India’s development, connecting people from all across the country, bridging gaps, and forging ties. Beyond their usual functions, post offices in the country can serve as good investment opportunities for citizens. Post offices are a great place to deposit money since they have government backing and a large network, and programs like the NSC post office scheme appeal to their strengths. Individuals can acquire these government-issued savings bonds at post offices across India, with several options available to fit their wants and requirements.

3) VPF

Another fixed-income investing option is the Voluntary Provident Fund, which is just an employee’s contribution to a provident fund account. For risk-averse investors looking to build long-term wealth, this is a solid alternative. You will not be obligated in any way to pay this off, but it is a good choice if you do choose it.


The PMVVY, which is administered by the Life Insurance Corporation of India (LIC), is a way to protect the elderly aged 60 and up from future drops in interest income due to difficult economic situations. This year, the investment ceiling for the same was increased from INR 7.5 lakh to INR 15 lakh. The benefit of this plan is that it provides a guaranteed pension based on an annual rate of return of 8% for a period of ten years.

5) PSU Bonds

These are bonds issued by government-sponsored entities with an extremely low chance of default. The interest income earned by these bonds is totally tax-free. However, any capital gains, if any, are taxable.

6) SSY

This is a little deposit scheme for girl children that was created as part of the “Beti Bachao Beti Padhao” campaign. It now has an 8.1 percent interest rate with income tax benefits. The scheme is available for your daughter from the time she is born until she is ten. The scheme has a minimum investment of INR 1000 and a maximum deposit of INT 1.5 lakhs for the current financial year. The account can be kept open for up to 21 years from the date of opening or until the girl becomes 18 years old.

These are some of the biggest fixed-income investment schemes in our country. Also, make sure you choose a scheme based on your financial goal.

How will these schemes help you, though? Let’s find out!

Advantages of these Schemes

There are various benefits to these schemes, and they are –

a) Your capital will always be preserved:

Capital preservation refers to safeguarding your investment’s entire worth through the assets that have a definite return on the principal goal. The investors who are approaching retirement age would rely on their investments for an income. Fixed-income assets are quite a smart alternative for investors with little time to recover losses because they normally carry less risk. You should, however, be aware of the risk of inflation, which can lead your investments to lose value over time.

b) There is the generation of income:

Fixed-income investments can help you maintain a consistent revenue stream. Investors get a predetermined sum of income in the form of coupon payments on the bond holdings at regular intervals. The Municipal bonds generate revenue that is tax-free in many cases.

c) You can have attractive returns:

Some fixed-income securities have the potential to yield high returns. Higher returns can be obtained by taking on more credit or interest rate risk.

d) It has lower risks than stocks:

Fixed income is generally thought to be less risky than stocks. As fixed-income investments are less susceptible to macroeconomic risks such as economic downturns and geopolitical events, this is the case.

If you’re looking forward to building your wealth over time in order to save for retirement or other long-term goals, you undoubtedly have a lot of stocks in your portfolio. However, dedicating a portion of your portfolio to fixed-income assets may help to mitigate losses when stock prices fluctuate.

The Bottom Line

Given that you have more options today – you need to try out different investment lines that can benefit you. The broadened options are not just to try out new things but to have the right kind of spread on your investment portfolio.

Read more: Commercial and Residential investment

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Sophia Anderson
Sophia Anderson is a finance writer and blogger with a passion for helping people improve their financial literacy. With over 5 years of experience in the finance industry, Sophia has worked with individuals, families, and small businesses to provide financial advice and guidance. Her expertise includes budgeting, saving, credit management, and debt reduction. Sophia is dedicated to breaking down complex financial concepts into easy-to-understand language and empowering her readers to make smart financial decisions. She is a frequent contributor to financial publications and has written extensively on topics such as personal finance, investing, and financial planning. Sophia's mission is to help people take control of their finances and achieve financial security and freedom. When she's not writing, Sophia enjoys hiking, practicing yoga, and reading personal finance books.