Best Investment Scheme for Senior Citizen Other Than Fd

Best Investment Scheme for Senior Citizen Other Than Fd

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
  • Time deposit (FD): 6.9% to 7.7%
  • RD: 7.2%
Included
  • The minimum amount for opening an RD account is Rs. 100 or any multiples of 10. There is no upper limit for investment.
  • The minimum amount for opening an FD account is Rs. 1000 or any multiples of 10. There is no upper limit. 
Senior Citizen Savings Scheme (SCSS) Low 8.6% per annum Included
  • The maturity period for SCSS deposit is five years. Premature withdrawal is allowed only after one year.
  • Depositors can make a minimum deposit of Rs. 1000 upfront. Deposits higher than Rs. 1000 should be made in multiples of 1000. The maximum limit is Rs. 15 lakh
Pradhana Mantri Vaya Vandhana Yojana  Low 8% Not included
  • Tenure of 10 years
National Pension Scheme Low No fixed interest rates. However, growth assured Included
  • NPS eligibility is for age groups 18 to 65, yet once the account is opened it can be extended upto 70 years
  • Upon maturity 60%of the corpus is tax-free. The remaining 40% must be used to obtain annuity.
Mutual funds High Returns dependent on the market performance Included
  • Fixed lock-in period
  • Investors who hold mutual funds will have to bear the mutual fund charges in the form of shareholder transaction costs, investment advisory fees, marketing, and distribution expenses.

Final thoughts

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.

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