Senior citizens often look for a safe investment avenue to invest their lifelong savings. One of the key aspects that they would look for is a way to maximize their savings without risking it. Here are a few suggested investment schemes that are perfect for senior citizens due to their features and benefits:
Post Office Monthly Income Scheme or Post Office MIS
Interest rate offered by this scheme is 7.3% that can be attained monthly. This scheme comes under the schemes offered by the government of India under Posts Department. The interest is received on a monthly basis as it starts from the time of the deposit. The highest that the limit goes for investing in this scheme is 4.5 lakhs in a single account and goes up to 9 lakhs in a joint account. Time period of the maturity of the account in this scheme is five years. There is no tax deduction in this scheme
Senior Citizen Savings Scheme (SCSS)
The Senior Citizen Savings Scheme (SCSS) offers interest rate of 8% and is operated by the Indian Government. The age criteria is 60 and above, but has now been lowered down to 55 for the citizens who opt for voluntary retirement. The tenure offered is five years and the interest rates are then not changed once the investment is done. The Interest rates though are revised every financial year by the government. The tenure can be extended to three years more only after maturity of the first investment. The tax deduction in this scheme is applied from the Section 80C, whereas the amount that withdrawn prematurely will not be deducted under the tax deduction benefit. The interest rate for this scheme is 8.5% which keeps fluctuating every financial year and increases at time quarterly. The account can be started by investing cash below 1lakh and by cheque if above 1 lakh.
The systematic withdrawal plans in mutual funds provide a monthly income to the investors from their investments. A specific amount is to be decided and given for the monthly income in the systematic withdrawal plan. On a given date the amount decided will be given to the account holder. A number of mutual funds offer an option of regular payment of money but they all are not guaranteed. It is attached to the market and the profit is distributed from those gains. The market function and profit or loss decides the amount that can be paid to them on a monthly basis.
Fixed Deposits (FD)
The tenure offered for Fixed Deposit scheme is from 15 days, 45 days, and one year to ten years. The interest rate offered in FD’s is 4% to 7.5% which is higher than the rates offered in any other scheme. The choosing between monthly and quarterly is the cumulative time period and the non-cumulative is the final time period during maturation of account. Therefore this scheme is safe for senior citizens monthly income. The market rates do not affect the interest rates, thus even if withdrawn during the market rates fluctuation, the amount and the interest will remain the same. The smart investment plan for monthly income for senior citizens is FD’s where they get good returns and flexible premature withdrawal options. One such Non-Banking Financial Corporation is Bajaj Finance which operates with similar benefits offering interest rates of more than 9% for senior citizens, and with flexible tenors ranging from 60 days to 10 years.
Public Provident Fund (PPF)
This scheme was started in 1968 by the Indian Government for the general public and is still in the grip of Indian Government. The interest received here is free from the income tax and the interest rates are revised and submitted by the government from time to time. The tenure of this scheme is for 15 years or can be extended within every five years. The tax benefits that can be availed in this scheme also come under Section 80C of IT Act. The interest income is not included in the Income Tax payable amount. Seeing these tax exemption benefits it is recommended for the senior citizens to invest in such schemes. The amount required to start an account for this scheme is Rs 500 and goes up till Rs. 1, 50,000. This scheme can be started from the post offices or other banks.
However, for stability of returns and as a safe mode of investment, Fixed Deposits outweigh the other investment schemes available for senior citizens. With a reliable company like Bajaj Finance, you would even be able to ensure that your account management can be done online without much hassle along with getting access to flexible tenors and higher interest rates.