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.

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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.

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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.

Also read: IRDAI allows renewal, portability of COVID-19 specific health policies

Here's a list of non-participating guaranteed returns products offered by different insurers (Compiled by PolicyBazaar):

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

(Edited by : Jomy)

First Published:Oct 16, 2020 5:07 PM IST