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I am a 27 year old from India, My salary is 4,20,000 per annum.

I don't have any insurance or any other investment plan right now.

I want to invest 50,000 Indian rupees, such that I get a good return and minimize my taxes too.

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Fundamental rule of investing money :

  1. High Risk High Return
  2. Low Risk Low return

Now come to the point, best money investment

  1. Public Provident Fund : It is the safest and secure long-term investment product amongst the best investment options in India. It is totally tax-free. Under the PPF account opened in bank or post office the money get locked for the time of 15 years and you can earn compound interest from this account.
  2. Investing a Mutual Fund : People who want to invest in equities and bond with a balance of risk and return generally choose to invest in mutual funds.
  3. Fixed Deposits : One of the safest short term investment plan available in the market is fixed deposit. This scheme offers a fixed rate of interest ranging from 4 to 11% per annum.
  4. 5 Years National Savings Certificate (NSC): National Savings Certificate by the Postal Department of India has a term period of 5 years. Being an effective investment scheme, the maturity amount is exempted from tax under Section 80C. The interest obtained, however, is taxable.
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Best way to invest around 50k Indian rupees and save Tax

There is nothing "Best". There are multiple options that are available under 80C and you need to select one that suites you best. There are market linked options like ELSS, or assured returns like 6 years FD, or PPF or Term Insurance or other such options.

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The best way to invest 50k Indian rupees is in a 5 Year NSC(National Saving Certificate which can be obtained at the Post Office) yielding interest 8.1% p.a. (at present), which is more than the effective FDR interest rate offered by any bank in India. Investment in an NSC also permits a deduction u/s 80C of the Income Tax Act, 1961. So, investing in an NSC will save tax and get a higher return/benefit for your investment.

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