Senior citizens cannot take risks when it comes to investing their hard accumulated retirement corpus. After retirement, senior citizens look for investment avenues which would give them a regular source of income and also be immune to market volatilities. As such, fixed income avenues are the most preferred avenues for investments for senior citizens. Here are some of the best investment avenues for senior citizens which give higher returns with lower risks –
• Pradhan Mantri Vaya Vandana Yojana (PMVVY)
The scheme of PMVVY is a scheme of investment for senior citizens which promises them pension payments. Individuals aged 60 years and above can invest in the scheme. The scheme is available until March 2020. The period of investment is 10 years and the scheme pays pensions, a death benefit as well as maturity benefit. The minimum rate of pension is INR 1000/month and the maximum is INR 10,000/month. Investments up to INR 15 lakh can be done under the scheme.
• Senior Citizen Saving Scheme (SCSS)
This is another popular scheme for senior citizens. Investment can be done up to INR 15 lakhs or the retirement benefit received by the senior citizen, whichever is lower. Investments are allowed as a tax deduction under Section 80C up to INR 1.5 lakhs. The interest rate is fixed and is reviewed by the Government regularly. The current interest rate is 8.7%. The minimum term of investment is 5 years, and it can be extended for up to 3 years.
• Fixed deposits
Fixed deposits continue to remain the most popular investment avenue for most individuals, senior citizens included. Fixed deposits can be selected for any tenure starting from 7 days and going up to 10 years. Best Fd Interest Rates are higher for senior citizens and the interest earned can be claimed as a deduction under Section 80TTB. Thus, fixed deposits give senior citizens a distinct tax advantage and are preferred.
• National Pension Scheme (NPS)
NPS is another attractive investment scheme that allows additional tax saving of INR 50,000. The scheme promises to create a retirement corpus and pays annuities. Investments done into the scheme are allowed as a deduction from your taxable income under Section 80CCD (1B). The invested amount is invested in market-linked funds, which give attractive returns. Moreover, on maturity, up to 60% of the accumulated corpus can be withdrawn in a lump sum and the withdrawn amount would be free from tax. The remaining would then be used to pay annuities creating a regular source of income.
• National Saving Certificates (NSC)
Post-offices offer nscs and they promise a fixed interest rate. The investment which is done into the NSC is allowed as a deduction under Section 80C up to INR 1.5 lakhs. Interest @ 8% is paid every year under this scheme. The minimum investment is INR 100 and there is no maximum limit which you can invest. There are two investment tenures of 5 years and 10 years and you can choose anyone.
So, these are some of the best investment avenues for senior citizens that give good returns and have very low or nil market risks. Which one would you select?
Read also: A FIXED DEPOSIT CALCULATOR