FIXED INCOME INSTRUMENTS- A HOT INVESTMENT OPTION

FIXED INCOME INSTRUMENTS- A HOT INVESTMENT OPTION

If you are an investor with an conservative approach and doesn’t want risk element in your portfolio then your portfolio must be consists of fixed income instrument. In today’s market, fixed income instruments are giving higher return as compared to the other options although investment in equity may give higher return but it always carry an risk element, which means that the return may fluctuate as per the market condition.

When it compared with fixed income instrument although fixed income instruments provide the comparatively less return then equity but still its rate of return is fixed throughout its tenure which means it is independent of market.

The following are the fixed income instruments available in the market:-

1.  Fixed Deposits- Rate Of Interest may vary from 8 % to 10.5% p.a, rate of interest may vary from bank to bank and its also depend on the tenure of deposit.

2.  Public Provident Fund- Rate Of Interest is 8% p.a

3.  National Saving Certificates- Rate Of Interest is 8% p.a

4.  Post Office Savings- Rate Of Interest is 8% to 8.5% p.a

5.  RBI Bonds- Rate Of Interest is 8% p.a

The main advantage of investment in above investment is that the investor gets the tax relaxation. The investment made in these instruments, the investor can save tax subject to specifying limit depend upon the different option and as per income tax act, 1965

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