Endowment plans are a safe mode of investment for individuals who are willing to stay invested for long periods of 12 to 13 years and seek guaranteed returns. Such plans offer returns of up to 6.75%, which, when compared with debt mutual funds and FDs, are relatively higher as the latter are taxed at the individual's income tax slab rate, bringing down the returns to 5%. Additionally, endowment plans are completely tax-free if the collective annual premiums are not greater than Rs 5 lakh.