Best Investment Plans for Salaried Employees With Low Risk [2026 Guide]

For salaried employees in India, income is steady, but time is scarce. Building a portfolio requires disciplined saving and smart tax planning, especially for those looking for low risk investment options in India. The secret to financial stability isn't chasing risky stock tips; it's maximizing government-backed instruments and leveraging the unique tax benefits*** available to you.
Choosing the best investment plans for salaried employees means creating a diversified portfolio that anchors in safety (debt/fixed returns) while using minimal risk exposure to beat long-term inflation. This guide from ABSLI details the safest and most tax-efficient options for your financial roadmap in 2026.

Pillar 1: The Government-Backed Low-Risk Trio

The three core instruments every salaried professional must use form the base of a secure, low risk investment portfolio.
The safest and best investment options for salaried persons are the government-backed trio: EPF (mandatory and highest fixed return), PPF (voluntary, tax-free debt anchor), and NPS (retirement focused, hybrid growth).
1.Employees' Provident Fund (EPF) - Mandatory Anchor
The EPF is a compulsory retirement scheme for most salaried employees, ensuring automatic, disciplined savings.

• Tax Status: EPF is a "Triple-E" (Exempt, Exempt, Exempt) investment. Contributions, interest accrual, and withdrawal (after 5 years of service) are all tax-free.
• Returns: For FY 2024-25, the interest rate was fixed at 8.25%⁽¹⁾, which is one of the highest guaranteed rates among small savings schemes (Source 3.2).
• Role: Since the contribution is automatic and the returns are high and secure, EPF should be viewed as the primary debt component of your retirement savings.
  

2.Public Provident Fund (PPF) - The Tax-Saving Safety Cushion
The PPF is a voluntary, long-term savings scheme open to all Indian residents.

• Risk Profile: PPF is government-backed, carrying virtually zero risk. The current interest rate is 7.1% ⁽²⁾.
• Tax Benefits***: Investment in PPF is tax-deductible up to ₹ 1.5 lakh under Section 80C⁽²⁾. The interest and maturity amount are entirely tax-free (E-E-E status).
• Lock-in: It has a 15-year lock-in period, making it ideal for pure, long-term low risk investment goals like retirement or children's marriage.
  

3.National Pension System (NPS) - Moderate Risk, High Reward
While NPS is market-linked, the low-cost structure and flexibility make it ideal for moderate risk exposure needed to beat inflation.

• Tax Advantage: NPS allows an additional deduction of ₹50,000 under Section 80CCD(1B)⁵, over and above the ₹1.5 Lakh limit, a significant saving tool for salaried employees.
• Risk Mitigation: NPS features a Life Cycle Fund (LC) option that automatically reduces equity allocation as you age, gradually shifting your portfolio towards safer government and corporate bonds as retirement nears.

Pillar 2: Fixed Income and Guaranteed^# Returns

Beyond the government schemes, salaried individuals need instruments for short-term liquidity and long-term capital protection without market volatility.
Fixed Deposits (FDs) should be used for liquidity/emergency funds, while Guaranteed^# Savings Plans provide the double benefit of life insurance protection and assured returns, making them ideal for medium-term goals.

Bank Fixed Deposits (FDs) and NSCs

FDs remain the most liquid low risk investment options in India after cash.

• Role: Use FDs for your emergency fund (3-6 months' salary) and for savings goals less than 5 years away. They offer guaranteed^# returns and are insured up to ₹5 Lakh under DICGC rules⁽⁴⁾.
• Tax Saver FDs: Bank FDs with a 5-year lock-in qualify for tax deduction under Section 80C5 (up to ₹1.5 Lakh). However, the interest earned is taxable.
• National Savings Certificates (NSC): These government bonds offer fixed returns (currently around 7.7%)⁽³⁾ and qualify for tax benefits*** under Section 80C5.

Guaranteed^# Savings Plans and ULIPs

Insurance plans offer a structured way to combine protection with capital growth, suitable for best investment plans for salaried employees.

• Guaranteed^# Savings Plans: These are non-linked plans from ABSLI that assure the maturity benefit irrespective of market performance. They are ideal for definite goals like a child's higher education, offering both a guaranteed^# return and life insurance coverage.
• Unit-Linked Insurance Plans (ULIPs): For salaried individuals willing to take moderate risk, ULIPs combine life insurance protection with market-linked investment. They offer tax benefits*** under 80C⁵ and tax-free maturity proceeds under Section 10(10D)**, subject to conditions.

The Priority: Layering Protection First

No matter which low risk investment options you choose, the primary step for a salaried employee should be securing your income replacement, which is the foundation of financial stability.

• Term Insurance: Buy a pure Term Insurance plan first. It offers the largest financial protection (Sum Assured) at the lowest premium, ensuring your family's future is secure even if you face an unfortunate event. Premiums paid are tax-deductible under Section 80C⁵.
• Health Insurance: Invest in a separate, comprehensive Health Insurance plan. This protects your savings from unexpected medical emergencies, ensuring you don't have to liquidate your low-risk debt investments prematurely. Premiums qualify for deduction under Section 80D⁵.

Conclusion

The best investment plans for salaried employees rely on a diversified approach. Start by maxing out the safe, tax-exempt government schemes like EPF and PPF. Supplement this anchor with NPS for inflation-beating growth and Fixed Deposits for liquidity. Finally, secure the entire plan with comprehensive Term and Health Insurance. By sticking to this low-risk, tax-efficient strategy, you ensure your money works hard and safely towards your financial goals in 2026.

Sources
⁽¹⁾ EPF Interest Rate (FY 2024-25), Employees' Provident Fund Organisation (EPFO):

• Source: Ministry of Labour and Employment/EPFO Official Circular.
• Source Link: https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y2025-2025/DeclarationOfROI_2024_25.pdf
• (Official government notification of the 8.25% interest rate for FY 2024-25.)
  

⁽²⁾ PPF/NSC Rates and Tax Benefits (7.1% / 7.7%), The Financial Express:

• Article Title: Small savings schemes: 5 best options with up to 8.2% interest rates
• Source Link: https://www.financialexpress.com/money/small-savings-schemes-5-best-options-with-up-to-8-2-interest-rates-in-2025-4040761/
• (Supports the current PPF rate of 7.1%, NSC rate of 7.7%, and Section 80C limit/benefit details for PPF.)
  

⁽³⁾ Tax Deductions (80C, 80D, 80CCD) and DICGC Limit, ClearTax / Income Tax Department:

• Source: ClearTax/Income Tax Department Guidelines.
• Source Link: https://cleartax.in/s/80c-80-deductions
• (Supports the Section 80C/80CCD(1B)/80D limits and tax benefit eligibility for instruments like NPS, Term Insurance, and Health Insurance.)
  

⁽⁴⁾ Deposit Insurance Coverage (₹5 Lakh), Reserve Bank of India (RBI) / DICGC:

• Source: Deposit Insurance and Credit Guarantee Corporation (DICGC) / RBI.
• Source Link: https://www.rbi.org.in/commonman/english/Scripts/FAQs.aspx?Id=272
• (Supports the deposit insurance limit of ₹5 Lakh per depositor under DICGC rules for Fixed Deposits.)