Amongst the requirements of digital color image watermarking–capacity is the major component to be addressed effectively. To address the same we proposed a method for inserting a color image into another color image of same size using non-blind watermarking scheme. From this method we achieved reasonably good perceptual similarity by measuring acceptable peak signal to noise ratio (PSNR) and structural similarity (SSIM) index. The method uses DMeyer single level discrete wavelet transformation (DWT) to get approximation coefficients-where most of the image information is stored, discrete Fourier transformation (DFT) is used to get set of components which are sufficient to describe the whole image and singular value decomposition (SVD) to get reliable orthogonal matrix of computationally sustainable components of the transformed image. The method is robust against attacks like–rotation, cropping, JPEG compression and for noises–salt and pepper, gaussian, speckle.