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Thursday, June 6, 2019

INVESTMENT OPTIONS FOR SENIOR CITIZENS

Normally   a retiree , who is dependent  on the income derived  from his  retirement benefits   , looks for  a  safe and secure  investment . If he / she draws pension ,  the investment return will be an additional income . Otherwise it will be his / her  sole income  . Naturally they look for  safe and secure investment avenues , avoiding   risky investments , even if they are offered better returns .

BANK  DEPOSITS 
Bank deposits are  most popular investment plans as they  assure    good returns with  safety   of investment .  But in the last 10 years  , the deposit interest  rates  of the banks have shown decline  and now stabilized around 7 %   . Public sector banks pay between 6.5 % to 7. 40 %  for 5 year term deposits  for senior citizens  while  private sector banks pay     7.00  %  to 8.35 %  for senior citizens   . Small finance banks pay    between  7.5  % to 9.10 %  for senior  citizens  .

  Up to Rs 50,000  of bank interest is tax free and  additional interest earned will be added to taxable income  of the deposit holder  .

​Senior citizens also have option of investing  in  Government backed investment schemes ,  NBFC  / Corporate bonds  and debt Mutual funds, which we explore below ​
GOVERNMENT BACKED  INVESTMENT AVENUES  
SENIOR CITIZEN SAVINGS SCHEME    ( SCSS )  : 

The scheme is  operated by Indian post  and available  in post offices   throughout India .   A senior citizen  can invest a maximum of Rs 15 lakhs  in the scheme  . Maturity after 5 years   with an interest of  8.7%    quarterly compounded and interest payable quarterly   .  

 LIC PRADHANA MANTRI VAYA VANDANA YOJANA 

The scheme is  operated by  Life Insurance Corporation of India  .  The scheme is  for 10 years  and fetches interest rate of 8 % pa . Interest in form of pension is payable monthly  .  A maximum amount of  Rs  15  lakhs can be invested  by senior citizens . 

GOI  7.75 % ( TAXABLE ) BOND 2018  

The bonds issued by Reserve Bank of India and are sold through SBI , Nationalised Banks and few private sector banks like ICICI , HDFC etc .  Bond is issued for a period of 7 years .  As name suggests , interest rate is 7.75 %  taxable .  One can receive interest annually or at the time of maturity . 

​​
NATIONAL SAVINGS CERTIFICATE  : 

The scheme is  operated by Indian post  and available  in post offices   throughout India .   Investment in the scheme  gets tax rebate under 80 c of the income tax act .  Scheme is for 5 years   . Interest at
8  %  pa and payable only on maturity . 



TIME DEPOSIT ACCOUNT WITH POST OFFICE : 

One can deposit any amount   and a deposit of 5 years fetches  interest of 7.8 %   with annual payment of interest 

MONTHLY INCOME  SCHEME OF INDIAN POST   ( MIS ) 

 The scheme is  operated by Indian post  and available  in post offices   throughout India . One can invest a maximum of Rs 4.5 lakhs    in the scheme .   Maturity after 5 years with an interest of 7.3 % pa  with monthly payment of interest .   

KISAN VIKAS PATRA  ( KVP ) 
 
The scheme is  operated by Indian post  and available  in post offices   throughout India .    The scheme is for 115 months and 7. 7%  pa and payable only on maturity . 

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