With age and experience comes wisdom. However, when it comes to investing during the retirement phase, senior citizens should choose an investment option that offers steady returns and financial stability. Therefore, it is necessary for Senior Citizens to devise a well-planned financial portfolio which ensures assured returns with minimal risk involved.
As a Senior Citizen investing in risk-free investments is as important as getting high returns. Planning financial investments based on their financial needs is the key. However, financial needs differ according to individual requirements and their investment plans should be curated accordingly. So, here we are with a list of the top 7 investment options for Senior Citizens to choose while planning their financial portfolio.
Senior Citizen FD
Senior Citizen FDs are highly profitable investment avenues with low market risk involved. The added benefit of investing in a Senior Citizen FD is the Senior Citizen interest benefit. Moreover, investing in a Corporate Fixed Deposit can prove to be more beneficial than investing in a bank FD as NBFCs provide a higher interest rate for FDs than banks. Investing in a reputed and trustworthy NBFC like Shriram Finance can give you interest benefits up to 9.40%* p.a. Shriram Finance Senior Citizen Fixed Deposit provides a flexible tenure ranging from 12 months to 60 months. Investors can personalise their FD plan by making use of the Fixed Deposit Interest Calculator and calculating their interest returns to customise the plan according to their financial plan. One can start a Shriram Finance fixed deposit with a minimum deposit of Rs.5000. A fixed deposit investment can be a pillar of support in the event of a financial emergency. Depositors can opt to avail a loan against their fixed deposit instead of breaking their savings. One can even opt for a premature withdrawal but it will be subject to a nominal penalty. Depositors can either compound their interest income or opt for receiving their interest amount in regular payouts.
Tax-Free Bonds
Government infrastructure firms like NTPC Limited, Housing and Development Corporation, NHAI, and Indian Railways Finance Corporation issue tax-free bonds. The bond has a term greater than ten years. There is also a lock-in period for the same till maturity. The plan offers capital protection while providing a guarantee of consistent income in the form of interest payments. Investors can still sell the bonds on the stock exchange even though there is a lock-in period and the bond returns are determined by the purchase price. Bond sale profits are subject to taxation under Section 112.
Post Office Monthly Income Scheme
The Finance Ministry governs the Post Office Monthly Income Scheme. Senior Citizen investors favour this investment option because it provides a fixed monthly interest rate and regular income. This low-risk monthly income plan offers significant capital protection during the initial years following retirement. The minimum deposit is Rs.1,500, and the maximum deposit per person is Rs.4,50,000. However, the maximum limit for a joint account is Rs.9,00,000. Additionally, the POMIS account is transferrable between post offices. The programme also permits early withdrawals after the first year of opening the account. Premature withdrawals are subjected to a nominal penalty.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is an investment programme that provides retirees and senior citizens with a steady income. People who are older than 60 years can invest in this plan. The Pradhan Mantri Vaya Vandana Yojana has a ten-year term period. The interest rate for Pradhan Mantri Vaya Vandana Yojana is 7.4% per year. At the beginning of each fiscal year, the interest rate is adjusted to reflect the interest rate of the Senior Citizen Savings Scheme. The deposit amounts range from Rs.1,50,000 to Rs.15,00,000. One can also get a loan against their deposits. After three years, a loan up to 75% of the purchase price may be obtained.
Mutual Funds
In order to invest in equities and debt securities, mutual funds pool the money of many investors with similar goals. The three types of mutual funds are equity, debt, and hybrid. Senior citizens can select the best option by lining up their goals with their specific objectives. For senior citizens, MFs are viewed as a flexible investment choice. Mutual fund investments can be made through a systematic investment plan (SIP) or a lump sum payment option.
Senior Citizen Savings Scheme
The government-sponsored Senior Citizen Savings Scheme is one of the most popular investment choices among retirees (SCSS). Anyone who is 60 years of age or older may invest in this plan. This is the best investment choice for senior citizens seeking a long-term savings plan with security. The plan is accessible nationwide at authorised banks and post offices. For investments made during the month of June-September quarter of the fiscal year 2022–2023, the Senior Citizen Savings Scheme offers an interest rate of 7.4% annually. In accordance with Section 80C of the Income Tax Act of 1961, get tax benefits of up to Rs.1.5 lakh annually.
Special Term Deposits with Banks
Several banks provide senior citizens with special term deposits of five years or longer. These special FDs have slightly higher interest rates but are also subject to restrictions on an early withdrawal.
Reasons Why You Must Invest in a Shriram Unnati Senior Citizen FD
Attractive Interest Returns
When one invests in Shriram Finance, they can be confident that their money is safe and that they will receive attractive return on investment (ROI) available for fixed deposits.
Loan Against FD
Investors can save without worrying about the economic downturn by investing in a Shriram Unnati FD. Depositors can borrow money against their Shriram Finance FD without having to break their FD savings.
Customized Plans
At Shriram Finance, investors can adjust their plans to suit their financial requirements. Shriram Finance provides flexible tenure choices ranging from 12 to 60 months.
Simple and clear processing
Opening a Shriram Finance FD is a simple, four-step online process that can be done from the comforts of your home. You can determine the precise amount that you would receive upon plan maturity using the FD calculator.
How To Apply for a Shriram Finance FD?
At Shriram Finance, opening an FD is a simple 4-step process.
Step 1:
Register using your mobile number
Step 2:
Enter your PAN details and Investment amount
Step 3:
Enter tenure, KYC & bank details and complete your payment.
Step 4:
Receive fixed deposit receipt and maximise your returns.
Invest Now and get Profitable Returns
Safe and low-risk investment plans are essential for senior citizens to have in their investment portfolios. Investing in a low-risk investment such as a fixed deposit can help you stabilise your finances and earn higher returns. Always make sure to calculate your returns before making an investment.
Key Highlights
- Investing in a low-risk, higher-return investment scheme can prove to be highly beneficial for Senior Citizens
- The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is an investment programme that offers Senior Citizens and retirees a steady income
- Among the top investment schemes available for Senior Citizens, Senior Citizen FDs have a minimum investment requirement of Rs. 5000.
- Senior Citizens can opt for higher interest income by investing in Corporate FDs than Bank FDs
FAQs
1) What kind of investment is the safest to make?
Investing in a low-risk investment which generates a regular income with assured returns can prove to be beneficial for Senior Citizens.
2) Which investment strategy is best for senior citizens?
Senior Citizens must consider investing at least 60% of their finances in low-risk and high-return investments. It is necessary for them to have savings, which could be handy in times of financial emergency.
3) What is the most secure investment with the highest return?
Investing in a Senior Citizen Fixed Deposit can prove to be the safest investment plan, which also yields higher interest returns. Investing in a fixed deposit assures liquidity of revenue as one can earn interest income in the form of regular payouts as well.
4) Is gold a wise investment for elderly people?
In general, gold is a bad investment, especially for retirement funds. Although it can be used as a store of value and is somewhat useful as a counter-cyclical asset, it is not a wise investment for elderly people. Investors who are planning to save for retirement should generally look for low-risk and high-return options.
