Most investors want to make investments in such a way that they get sky-high returns as quickly as possible without the risk of losing principal money. This is the reason why many are always on the lookout for top investment plans where they can double their money in a few months or years with little or no risk.

However, a high-return low-risk combination in an investment product does not exist. In reality, risk and returns are directly related and they go hand-in-hand, i.e., the higher the returns, higher the risk and vice versa.

While selecting an investment avenue, you have to match your own risk profile with the associated risks of the product before investing. There are some investments that carry high risk but have the potential to generate higher inflation-adjusted returns in the long term while some other investments come with low-risk and therefore lower returns.

There are two buckets that investment products fall into and they are financial and non-financial assets. Financial assets can be divided into market-linked products (Example: stocks, mutual funds) and fixed income products (Example: public provident fund, bank fixed deposits). Most popular non-financial assets are physical gold and real estate.

Here is a look at a few investment avenues available in India..

1. Direct Equity

Investing in stocks might not be everyone's cup of tea as it's a volatile asset class and there is no guarantee of returns. Further, not only is it difficult to pick the right stock, timing your entry and exit is also not easy. The only silver lining is that over long periods, equity has been able to deliver higher than inflation-adjusted returns compared to all other asset classes. At the same time, the risk of losing a considerable portion or even all of your capital is high unless one opts for a stop-loss method to curtail losses. In stop-loss, one places an advance order to sell a stock at a specific price. To reduce the risk to a certain extent, you could diversify across sectors and market capitalisations. To directly invest in equity, one needs to open a demat account. Investing through a PMS is another option to invest in direct equities wherein the portfolio is managed by a professional portfolio manager.

2. Bank Fixed Deposit (FD)

A bank fixed deposit is considered a comparatively safe choice for investing in India. Under the deposit insurance and credit guarantee corporation (DICGC) rules, each depositor in a bank is insured up to a maximum of Rs 5 lakh with effect from February 4, 2020 for both principal and interest amount. Earlier, the coverage was maximum of Rs 1 lakh for both principal and interest amount. The interest rate earned is added to one's income and is taxed as per one's income slab.

3. Company Deposits

These fixed deposits are the same as bank FD’s but the only difference is, instead of banks we lend our money here to companies. Banks are more closely regulated and hence investment in banks is a lot safer. In comparison, fixed deposits in companies are slightly more riskier. In case the company goes under liquidation, then the invested money is under risk. The interest generated from company fixed deposits are taxable.

4. Government Securities (G-Secs)

Government securities (G-secs) are investment options issued directly by the reserve bank of India (RBI). G-sec is an investment option using which, the government of India borrows money from investors like Banks, etc. Out of all G-secs issued by the RBI, 5% is allocated for retail investors. This is done to encourage participation of retail investors in the debt market. But the procedure is not so simple for a common man to buy G-secs. First, one has to approach their bank and open an account called CSGL (Constituent Securities General Ledger). But the account opening itself is not as easy as opening a normal bank account. There are several criteria following which a CSGL account can be opened for an individual.

5. Mutual Funds (Equity Funds & Debt Funds)

Equity mutual fund schemes predominantly invest in equity stocks. As per the Securities and Exchange Board of India (Sebi) Mutual Fund Regulations, an equity mutual fund scheme must invest at least 65 percent of its assets in equity and equity-related instruments. An equity fund can be actively managed or passively managed. In an actively managed fund, the returns are largely dependent on the fund manager's ability to generate returns. Index funds and exchange-traded funds (ETFs) are passively managed, and these track the underlying index. Equity mutual funds are also categorised according to market-capitalisation or the sectors in which they invest. They are also categorised by whether they are domestic funds (investing in stocks of only Indian companies) or international funds (investing in stocks of overseas companies).

Debt mutual fund schemes are suitable for investors who want steady returns. They are less volatile and, hence, considered less risky compared to equity funds. Debt mutual funds primarily invest in fixed-interest generating securities like government securities, corporate bonds, treasury bills, commercial paper and other money market instruments. However, these mutual funds are not completely risk-free. They carry risks such as interest rate risk and credit risk. Therefore, investors should study the related risks before investing.

6. National Pension System (NPS)

The National Pension System is a long term retirement - focused investment product managed by the Pension Fund Regulatory and Development Authority (PFRDA). It is a mix of equity, fixed deposits, corporate bonds, liquid funds and government funds, among others. Based on your risk appetite, you can decide how much of your money can be invested in equities through NPS.

7. Public Provident Fund (PPF)

The Public Provident Fund is one product a lot of people turn to. Since the PPF has a long tenure of 15 years, the impact of compounding of tax-free interest is huge, especially in the later years. Further, since the interest earned and the principal invested is backed by sovereign guarantee, it makes it a safe investment. Remember, the interest rate on PPF is reviewed every quarter by the government.

8. Senior Citizens' Saving Scheme (SCSS)

Probably the first choice of most retirees, the Senior Citizens' Saving Scheme is a must-have in their investment portfolios. As the name suggests, only senior citizens or early retirees can invest in this scheme. SCSS can be availed from a post office or a bank by anyone above 60. SCSS has a five-year tenure, which can be further extended by three years once the scheme matures. The upper investment limit is Rs. 15 lakh. The interest rate on SCSS is payable quarterly and is fully taxable. Remember, the interest rate on the scheme is subject to review and revision every quarter. However, once the investment is made in the scheme, then the interest rate will remain the same till the maturity of the scheme. Senior citizens can claim deduction of up to Rs 50,000 in a financial year under section 80 TTB on the interest earned from SCSS as per Income Tax rules.

9. Pradhan Mantri Vaya Vandana Yojana (PMVVY)

PMVVY is for senior citizens aged 60 years and above to provide them an assured return. The scheme offers pension income payable monthly, quarterly, half-yearly or yearly as opted. The minimum pension amount is Rs 1,000 per month and maximum Rs 9,250 per month. The maximum amount that can be invested in the scheme is Rs 15 lakh. The tenure of the scheme is 10 years. The scheme is available till March 31, 2023. At maturity, the investment amount is repaid to the senior citizen. In the event of the death of a senior citizen, the money will be paid to the nominee.

10. Real Estate

The house that you live in is for self-consumption and should never be considered as an investment. The second property you buy can be your investment if you do not intend to live in it. The location of the property is the single most important factor that will determine the value of your property and also the rental that it can earn. Investments in real estate deliver returns in two ways - capital appreciation and rentals. However, unlike other asset classes, real estate is highly illiquid. The other big risk is with getting the necessary regulatory approvals, which has largely been addressed after the coming of the real estate regulator in India.

11. Gold

Possessing gold in the form of jewellery has its own concerns such as safety and high cost. Then there's the 'making charges', which typically range between 6-14 percent of the cost of gold (and may go as high as 25 percent in case of special designs). For those who would want to buy gold coins, there's still an option. Many banks sell gold coins now-a-days. An alternate way of owning gold is via paper gold. Investment in paper gold is more cost-effective and can be done through gold ETF (Exchange Traded Funds). An investor can also invest in gold mutual funds which invest in Gold ETF.

Sovereign gold bond scheme is an alternative way for common man to invest in gold. Sovereign gold bonds are bonds issued by the government of India for a tenure of 8 years. These Bonds have denominations in 1 gram of gold. One can buy SGB in multiples of 1 grams of gold. The minimum investment is 2 grams and maximum investment allowed is 500 grams in one financial year. Upon redemption of the SG bond, the person will receive the equivalent amount of the price of Gold at the time of redemption. In order to buy SGB one can apply online for the same from any commercial banks website. If one wants to redeem the SGB early, it can be done only after 5 years. In addition to the capital gain, one will also earn 2.5% interest on the deposit. Capital gain tax is applicable on SGB if redeemed before maturity period. But Capital gain tax is exempted if redeemed on maturity.

12. Unit Linked Insurance Plans, Endowment Plans & Annuity Plans

A Unit Linked Insurance Plan (ULIP) is a combination of investment and insurance. In this plan, one part of the premium amount is used to provide a life insurance cover and the remaining sum is invested. The problem here is that a portion of the premium goes for various charges like mortality charges, administrative charges, premium allocation charges etc. In the initial years, the various such deductions means that a considerable percentage of premium goes for various charges. This could result in lower returns for the investor.

An endowment policy is a life insurance contract designed to pay a lump sum after a specific term (on its 'maturity') or on death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. There is an amount guaranteed to be paid out called the sum assured and this can be increased on the basis of investment performance through the addition of periodic bonuses.

Annuity plans are pension products, they are opposite of a life insurance policy. In an annuity plan, a person pays either a lump sum amount or regular instalments in the given period to get regular payments or payouts as long as he/she lives. The annuity plan covers your financial risk by helping you get a regular payment in your sunset years for a comfortable living.