Nowadays, more and more numbers of Senior Citizens are conscious of their financial investments. They don't want to be dependent on their children for their livelihood and other expenses. In fact, they want to enjoy their life to the fullest in the maturing age with their hard earned money. Therefore investing in high return schemes has become their priority. Therefore, the best Senior Citizen Investment Options are therefore, which give them high returns along with providing security.
That is why few points have to be kept in mind that, the investment should be risk-free. Apart from having a diverse investment portfolio, it should be in such a manner that gives a steady income every month. As it is said that it is never too late to begin, therefore it is good to start investing for the retirement right not. Here are a few senior citizen investment options that can be taken into account-
- Fixed deposits with banks and post offices
- Pension plans
- Senior citizen saving schemes
- Equity-linked savings scheme (ELSS)
- National saving certificate (NSC)
Fixed Deposits -
Fixed deposits are also known as term deposits, these types of accounts can easily be opened with any bank or post office.
The minimum to maximum period for these deposits ranges from 7 days to 10 years. Most of the banks offer 25 to 50 basis points higher interest rates to senior citizens as compared to other individuals.
Senior citizens can open a Fixed deposit account in such a manner that the interest accrued on the sum can be withdrawn periodically or they can withdraw the whole sum of rupees including interest after the maturity period based on their choice. Post offices, however, offer FD schemes for a period ranging from 7 days to 5 years but the important thing is that post offices offer more interest rates as compared to banks.
Pension Plans -
Pension plans are the most important type of Senior Citizen Investment Option, as it ensures steady income after retirement.
There are mainly two types of pension plan available in the market, in the first type, you can invest a large amount in a single time and in the second type, you can invest smaller amounts regularly, in both the ways, you will be able to maintain a steady income based on the invested amount.
The investment amount could be as low as Rs 200 a month. The interest rates on pension plans range from 3-7% based on the company the plan has been bought from. Lock in period is minimum 3 years.
EPF and PPF are also similar to a pension plan where you invest money on regular basis. In PPF the minimum amount of money that can be invested is as low as Rs 500 per year and the maximum amount is Rs150000 per year. In EPF a certain amount of money is deducted from a person's salary every month. Both EPF and PPF offer interest rates ranging from 8.1% to 8.8%. The minimum lock-in period for PPF is 15 years while in EPF you can withdraw money after retirement.
The amount withdrawn from EPF is taxable and to get tax benefits, you have to again invest this amount into annuity plan. Annuity plans are the same as pension plans where you get regular income. But you have to choose annuity plans wisely, as these offer a low-interest rate also a service tax at a rate of 3.5% on multiple premium annuities and 1.4% at single premium annuity is payable by the investor.
- Check out: How to save income tax in India
Senior Citizen Savings Scheme-
This scheme is specially designed for the senior citizens interested in depositing huge amounts. This scheme is easily available in banks and post offices.
The amount in this scheme is deposited in a lump sum and the maximum amount that can be invested is 15 lakh, lock-in period for this scheme is 5 years, which can be further extended for 3 years. In this scheme, the interest rates are generally higher as compared to other investment options.
- Check out: Saving Account with Interest Rates in India
Equity-linked savings scheme-
It is a market linked plan which can give good returns if the investment is made wisely. It is though basically not made for senior citizens but can give good returns on investments if you have a good knowledge of market patterns. T
he invested amount is exempted from tax under section 80C, also no long-term capital gains are taxable on the sale of these funds, dividends are also not taxable. The minimum amount that can be deposited is Rs 500 and the maximum amount has not any limit which means you can invest as much as you want without worrying about tax.
The lock-in period is minimum 3 years and no withdrawal is allowed before the lock-in period however you can choose the tenure of your investment. All in all, it is a great Senior Citizen Investment option.
National Savings Certificate(NSC)-
National savings certificate are offered by post offices, which are considered as safe investments with good returns.
NSC can be bought in the multiples of Rs 100 with a tenure of 5 years, the minimum investment amount in NSC is Rs 100. There is no maximum limit for investment in NSC. The scheme offers an interest rate of 8.1% at present.
You will enjoy tax deduction under section 80C on the deposited amount. However, interest income is taxable. No withdrawal is allowed before the maturity date.
So, if you are planning for a better life after retirement, invest your money in good schemes, do proper research before investing, maintain a diversified investment portfolio and look for long-term high returns generating schemes, so that you can maintain a sustainable lifestyle even after retirement.
I hope aforestated Senior Citizen investment options would have guided you make the right choices for securing your future and enjoying life with same fun and fervor as you do right now.
In case you have any query about Senior Citizen investment options, write to us in comments and our experts will guide you take right financial decisions in life.