Most investors want the best of returns with full safety of the principal amount invested.
In reality, risk and returns are inversely related i.e. with more risk comes higher returns and vice versa. The two options available to investors are fixed-income investments and market-linked investments and one has to either choose one of them or a mix of both of them. The decision to choose between the two is fairly simple. For a goal that is still a few years away, the reason to take risk might still exist while for goals that need attention within a few months or years, it could really be a risky venture.
Fixed-income investments:
Interest-bearing investments such as bank fixed deposits, company deposits, post office small savings products and bonds are popular among fixed-income investors. They come with a fixed return and a pre-decided maturity period. They, therefore, belong to the debt-asset class. Choose them if you are an ultra-conservative investor and wants to preserve your capital or when the goal is near.
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