With changing times, the financial needs of people have also evolved. Senior citizens are getting less dependent on their children after retirement because of rising income, more corpus, better investment opportunities, and more financial awareness. With effective investment options put into place, such as well-planned pension schemes, VPF/EPF options, etc., people can save sufficient corpus for after-retirement life. But once you near retirement, there is a common concern about not getting a steady source of income. But with so many investment options at your disposal, choosing the right one can be tiring. So, which one will fetch you great returns, and at the same time, keep your savings safe? Below are a few of the investment options popular in the country for senior citizens –
Debt Mutual Funds
It is difficult to keep track of the stock market, especially with multiple options coming your way once you cross 60 years of age. Some argue mutual funds are a great option for senior citizens. Mutual funds work by pooling money from multiple investors to invest in debt securities and equities. There are various kinds of mutual funds – debt funds, equity funds, and hybrid funds. While equity mutual funds invest in equities, mostly, debt funds invest majorly in money market securities. Senior citizens can also choose the route of systematic investment plans (SIP) and invest with an amount they are comfortable with at regular intervals, and also choose to withdraw a variable or fixed amount at intervals of their choosing. However, you must ensure that you pay taxes on any capital gains on SIP withdrawals.
National Pension Scheme
People between the ages of 18 to 65 can avail of the national pension scheme, while senior citizens can also extend the tenure of the scheme to 70 years. Furthermore, senior citizens can also claim tax exemptions under Section 80C for an amount up to INR 1.5L. Senior citizens can direct the investment to NPS towards equity as well to earn more returns. However, NPS does not offer a steady stream of income but provides great returns.
Senior Citizens Fixed Deposits
The recent pandemic created a financial scare/insecurities among the general population, and more so in the case of senior citizens. With the situation impacting the market rates globally, one investment scheme stood out in the wavy waters by offering steady income and assured returns at zero risk. Investors above the age of 60 can expect to get higher FD interest rates. Apart from getting great FD interest rates, senior citizens can also lessen their tax liability by claiming tax exemption under Section 80C for a maximum investment of INR 1.5L per annum. Few banks, such as the IndusInd Bank in India provide the highest FD interest rates which you can avail for your parents to grow your wealth.
When you want to enjoy your time off and relax without worrying about getting your next paycheck, investing in a scheme that provides a steady income can be welcoming. Senior citizens can now worry less and enjoy their time off by making the best decision of investing a part of their savings in fixed deposits. Not only will senior citizens enjoy high-interest rates, and assured returns, but also flexible tenure – ranging from 6 months to 10 years for online FD and 7 days to 10 years for offline FD. Consider your financial goals before investing in any scheme so make sure you get the best value out of your money.