Investors looking for guaranteed capital and good returns generally park their money in bank fixed deposits (FDs). These bank FDs are safe as there is no equity exposure. However, in the last few years, the rate of interest on bank FD's has fallen down drastically.
According to Vivek Jain, head-investments, PolicyBazaar, the rate of interest on FDs has dropped from 8.5 percent per annum in 2014 to 5.4 percent in 2020 which is an all-time low. And then, there is no certainty if the rate of interest will go up from here or fall further in the next few years.
Also, investors can only lock in the offered interest rate for a maximum of 10 years in bank FDs. This is why investors need a solution which apart from promising guaranteed returns can pay good returns on the investment.
One such solution for the customers is non-participating guaranteed returns products.
Under these products, as Jain explains, the capital of the customer is guaranteed and the investor can lock-in the offered rate of interest for a maximum of 25 years.
"These products promise one of the best rates of interest on the capital invested apart from providing a life cover that is 10 times the annual premium. Most importantly, the returns and the capital invested both qualify for a tax rebate," he opines.
Here's a list of non-participating guaranteed returns products offered by different insurers (Compiled by PolicyBazaar):
|Insurer||HDFC Life||ABSLI||Bajaj Allianz Life||HDFC Life||Bajaj Allianz Life||Max Life||ICICI Prudential|
|Plan Name||Sanchay||Guaranteed Milestone Plan||GIG-Lumpsum||Sanchay Plus-Long Term Income||GIG-Income||Smart Wealth Plan-Long Term Income||ASIP|
|Premium (without GST)||60,000||60,000||60,000||60,000||60,000||60,000||60,000|
|Income Payout period|
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(Edited by : Jomy)
First Published: IST