February 23, 2024
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How to Invest your Retirement Funds

senior citizen fixed deposits

Investing your retirement funds in schemes that will provide fixed income and high returns is necessary. To create a diverse investment portfolio which balances the risk factor of investment, you can invest in different schemes. You can select few schemes which will provide fixed returns and other schemes that will provide high returns. To list out all the investment plans and schemes that are available in the market is out of the scope of this article. Hence, to let you select from the best, here is the list of the most effective investment plans to put your retirement corpus in.

Government Savings and Pension Scheme

The most popular government scheme for senior citizen is the SCSS scheme. Under the Senior Citizen Savings Scheme (SCSS) you get the primary benefit of high returns at interest rate of 8.5% per annum. The option of having multiple accounts, either individually or with a joint investor makes this scheme more advantageous. You can invest a maximum amount of Rs 15 lakhs for 5 years. This period can be extended to a further period of 3 years once the amount matures at 5 years. You can start investing in this scheme at the age of 60 or above.
Other noteworthy investment plans for senior citizen include Post Office Monthly Investment Scheme, National Pension System and other government approved schemes. These schemes provide you monthly fixed returns at higher rate in addition to giving tax benefits. While there are various benefits of such schemes, the problem with them is they don’t provide flexible liquidity as no premature withdrawals can be done. Additionally the limited amount for deposit does not allow you to get higher returns.

Senior Citizen Fixed Deposit

Fixed deposits are a favourite investment option amongst senior citizens. The features of safety, fixed returns and comparatively easy process of investment make fixed deposits more desirable investment option. Investing in senior citizen fixed deposits with banks provide you an interest rate of maximum 7%. On the other hand investment in FDs with NBFCs like Bajaj Finance gives further higher interest rate of 8.20%. Investment at high senior citizen fixed deposit interest rates comes with added advantage of flexible amount of investment at such companies. You can start investing with just Rs. 25,000 in fixed deposit accounts with NBFCs.

Furthermore, investment in fixed deposits can be done for flexible tenors. There is no charge deducted on premature withdrawal of FD amounts. The stability of your funds and the returns are guaranteed with fixed deposits accounts. You can avail all such benefits through quick online application process at Bajaj Finance with minimum documentation and instant account approval.

Bond Investments

If you are considering investing in bonds, then investing in tax free bonds is a good option to enjoy tax free returns. These bonds are issued by government backed institutions and are low risk investments. The benefits of investing in these bonds include saving on taxes as there is no TDS involved and no tax imposed on the return as well. The only drawback of this investment is that it is a long term investment with low liquidity. Once you invest your money, you have to forget it for 10, 15 or 20 years till it matures.

Mutual Funds

Mutual funds are another effective investment option that provides healthy returns. To dilute the risk factor in order to get fixed high output, choose to invest in equity backed funds. These funds generate higher returns and are comparatively safer. Though the returns, interest rates and dividends are subject to inflation, mutual funds have highly flexible liquidity. With no premature withdrawal charges and interest deduction you can withdraw the amount at any time and you will receive a matured sum. Mutual funds also adjust easily to market inflation than the other assets. To reduce the tax and get more returns you can also invest in debt funds.

By investing in one or all of these options, you are ensuring that your retirement funds are able to generate returns throughout your retired life.

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