How to make money without investing in stocks?

If you want to earn money from investments without having to zero in on the individual stocks, there are a slew of options to go around such as debt mutual funds, public provident funds and national saving certificates.

Samiksha Bhateja, MintGenie Team
Updated17 Mar 2022, 11:13 PM IST
There are many options to make money without getting exposed to the stock market such as debt mutual funds, public provident funds and national saving certificates.
There are many options to make money without getting exposed to the stock market such as debt mutual funds, public provident funds and national saving certificates.(Image by Tumisu from Pixabay)

Most of the financial experts around us often suggest investing in stock markets to earn income on investment. However, one might wonder whether it’s mandatory to invest in the market. Let's find out what are the other options to earn a regular income without getting exposed to stock markets — at least directly.

Let us take a look at some of the alternatives to market investments:

Debt Mutual Funds

A debt mutual fund also known as a fixed-income fund invests major portions of your money into fixed-income assets such as government bonds and bonds. By investing money in such a way, debt reciprocal funds significantly reduce the risk element for investors. This is a generally solid option for investment that might help build wealth. Over the long run, money market mutual funds have generally averaged between 3 percent and 4 percent returns annually.

Benefits of Debt Mutual Funds

Stable income - Although debt funds are less risky than equity funds, returns are not guaranteed and are susceptible to market risks.

Tax saving - Many invest money since their annual tax expenditure gets lowered. So you can consider investing with debt mutual funds if tax reductions are a critical financial goal. Also, you pay tax only in and not before the year in which you settle your debt funds. You pay tax on the proceeds of the restitution, even if the restitution is partial.

High Liquidity - Fixed deposits have a predetermined period of lock-in. The lender can levy the penalty for you when you prematurely wind up your FD. While the debt mutual funds do not have a lock-in period, certain funding carries an exit load, which is an early withdrawal charge deducted at the source.

The period of departure load varies from fund to fund, and some funds have no exit load. However, debt mutual funds are liquid and you can withdraw on each working day from the fund.

Stability - Debt investment can also boost your portfolio balance. Equity funds can be volatile (while generating larger returns). This is because equity returns are directly related to stock market performance. You may properly diversify your portfolio by investing in debt funds and reduce the overall risk (cushion the downside.)

Flexibility - Debt funds also allow you to move your money to a variety of funds. A systematic transfer plan is also available where you can invest a big sum in debt funds and transfer a little part of the fund in regular intervals into equities systematically. This allows you to spread the risk of shares over a certain number of months instead of investing in one go. This degree of flexibility is not offered in other typical investments.

Public Provident Fund

The PPF is a popular investors’ investment scheme with its multiple investment-friendly characteristics and associated advantages. It is a long-term investment scheme that is popular with individuals who are looking for high earnings and steady returns. 

The security of the principal is the primary objective of people who register a PPF account. The PPF Interest rate is set by the government, every quarter.

For instance, the interest rate for Q2 (July-September) FY 2021-22 for PPF accounts is fixed at 7.1 percent. The minimum investment in a Public Provident Fund (PPF) account per year is Rs 500 and the maximum is Rs 1.5 lakh.

Benefits of Public Provident Fund

PPF is an investment truck that is categorised as exempt-exempt-exempt (EEE). In other words, under Section 80C of the Income Tax Act, any deposits made in the PPF are deductible. In addition, at the moment of withdrawal, the amount and interest accrued will also be excluded from tax.

It must be noted that before maturity, a PPF account may not be closed. However, from one designation point on, a PPF account may be transferred to another. The nominee's file can only be closed when the account holder dies.

National Saving Certificate

The National Certificate of Savings (NSC) is an investment scheme with fixed income that can be opened with any postal office. The plan is an initiative of the Government of India. The savings bank promotes subscribers, especially SMEs, to invest while saving income tax. It encourages subscribers to invest.

This programme is also a fixed-income tool like the Public Provident Fund and Post Office FDs. You can purchase it as a joint account at the nearest postal office, a minor or with another adult. The NSC has five years of fixed maturity. There is no limit on the total amount of NSCs that you can buy, but tax exemption is given only up to Rs 1.5 lakh under section 80C of the Income Tax Act.

The certificates accrue a fixed rate of interest, which is reviewed regularly by the government, which is currently at a rate of 6.8% per annum. The Minimum Amount to be invested in National Savings Certificate is Rs. 100 and there is no maximum limit on the amount to be invested in the NSC. It comes with a lock-in period of 5 years, i.e. it cannot be withdrawn before maturity.

Benefits of National Certificate of Savings

Fixed Income - The NSCs generate a guaranteed return for investors at a rate of 6.8 per cent. Their returns are often higher than those of FDs.

Tax saving - You are entitled under Section 80C of the Income Tax Act, 1961 to claim up to Rs 1.5 lakh as a tax exemption.

High return - The interest rate is currently 6.8% p.a. and is revised every quarter by the government. It is compounded every year, but payable in due time.

Easy to subscribe - By presenting the relevant documentation and following the verification procedure, you will be able to purchase this scheme at any post office. The certificate from one postal branch to another can also easily be transferred.

Can be used as collateral - Banks and NBFCs accept NSCs as collateral or security while giving loans. To do this, a transfer stamp should be inserted on the certificate by the postmaster responsible and transferred to the bank.


Employees' Provident Fund, or EPF, is a popular savings system created by the EPFO under the supervision of the Indian government. The savings scheme is aimed at paid workers in order to encourage them to save money in order to develop a sizable retirement fund. The government reviews the interest rate on EPF accounts regularly. For FY 2019-20, the interest rate notified is 8.5%.

Benefits of EPF

Capital growth – The PF online scheme pays a predetermined interest rate on deposits made with EPF India. Furthermore, extending awards at maturity ensures that employees’ assets grow and capital appreciation is accelerated.

For Retirement Corpus: The Employee Pension Scheme receives around 8.33 per cent of an employer’s contribution. In the long run, the money put into the employee provident fund contributes to a healthy retirement fund. After retirement, they can have a sense of financial security and freedom thanks to such a fund.

Emergency Corpus – Life is full of surprises. As a result, the best thing an individual can do to deal with unforeseen circumstances is to be financially prepared. When an individual requires emergency money, an EPF fund serves as a safety net.

Employee contributions to their PF account are regarded as eligible for tax exemption under Section 80C of the Indian Income Tax Act. Furthermore, earnings produced through the EPF system are tax-free. This type of exemption is available up to a ceiling of Rs 1.5 lakh.

Premature withdrawal is simple. EPF India members are eligible for partial withdrawal rewards. Individuals can take money out of their PF account to cover specific needs such as to pursue further education, build a home, pay for wedding expenditures, or for medical treatment.

Commercial Real Estate

Commercial real estate is a property that is utilised for commercial purposes only, and not as a living space. Commercial property is most typically rented to tenants for income-generating operations. 

This wide range of property might contain everything from a single shop to a major shopping centre. Commercial immobilisation comprises several sectors including stores, offices, hotels and resorts, restaurants and health services of all types.

Benefits of Commercial real estate

Attractive rates are one of the main benefits of commercial real estate. Commercial real estate can have remarkable returns and significant monthly cash flow in places where the quantity of new construction is limited by land or law. The rental rate of industrial buildings is typically lower, even if the overhead expenditures are also lower compared with an office tower.

The commercial immovable property also benefits from comparatively longer tenant leases than that of residential property. This period of renting provides the commercial landowner with significant income flow stability, as long as the building is occupied by long-term tenants.

Commercial property, in addition to a stable source of income, offers the opportunity for appreciation of capital as the property is maintained well. And it is a separate asset class like any other kind of real estate that can offer a balanced portfolio and an efficient diversification alternative.

So, there are several options to earn income without directly getting exposed to the stock markets. One can choose among those alternatives based on the risk appetite of investors and the quantum of investment available.


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First Published:17 Mar 2022, 11:13 PM IST
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