As the brink of retirement approaches nearer, investors should be very diligent while preparing their investment plan. Besides fulfilling the saving criterion, it should also bring a viable income. According to financial experts, an ideal portfolio for investment should consist of both low risk and high-risk investments. However, the end decision is dependent on the investor’s risk appetite and financial goals.
Devised below is a comprehensive guide on the best investment schemes for senior citizens.
Investment options: A glance
Over the years, fixed deposits have been the most sought after option for investment. Its ability to be risk-averse with added properties of liquidity through premature withdrawal and loan against FD flares up its appeal. Most of the banks and HFCs also enable investors the flexibility to choose the interest payouts. Hence the frequency can be selected based on the requirements of the investor. The current FD rate in India range from 4% to 8%. Senior citizens are eligible for senior citizen FD rates of 0.25% to 0.75% higher than regular deposits rates. NBFC platforms such as PNB Housing Finance, for example, offers FD interest rates upto 8.40% and senior citizen interest rates upto 0.25% higher.
Listed below are some of the other investment options.
|Investment tool||Risk factor||Interest range||Section 80C, Tax deduction eligibility||Other features|
|Post Office Fixed Deposits and Recurring Deposits||Low||
|Senior Citizen Savings Scheme (SCSS)||Low||8.6% per annum||Included||
|Pradhana Mantri Vaya Vandhana Yojana||Low||8%||Not included||
|National Pension Scheme||Low||No fixed interest rates. However, growth assured||Included||
|Mutual funds||High||Returns dependent on the market performance||Included||
Every investment choice must be made based on the financial goals and risk appetite of the investors. Before making an investment decision, investors should develop a goal chart, conduct due diligence and determine the risk factor of the lender. Ideally, a combination of high risk and low-risk investments converges regular income with wealth growth for senior citizens.