How do you maintain a fine balance between saving for emergencies and investing for profits?
This is a common concern among investors aged 60 and above. After all, you don’t earn a steady income anymore, but got years ahead to plan. However, with so many investment vehicles at disposal, selecting the right one can get tiring. Should you settle for a Systematic Withdrawal Plan? Or take the conventional approach with fixed deposits? We’ve got you covered!
Below are five of the best investment schemes for senior citizens and pensioners in 2022.
1. Senior Citizen Savings Scheme (SCSS)
SCSS is unarguably the best investment option for senior citizens. The scheme offers interest payments to investors every quarter, so you can support your golden years with a regular income. You also get the sovereign guarantee and reliable returns by the end of five years.
Here’s everything else you should know:
- You can open an SCSS account at a bank or post office near you. The minimum account opening balance is Rs. 1000.
- It comes with a lock-in period of five years. But you can renew the scheme for 3 more years after maturity.
- The finance ministry revises the SCSS interest rate quarterly. So, your earnings increase or decrease accordingly. However, the returns are fully taxable.
- Interest collected on the deposit is taxable.
2. Senior citizen fixed deposit
Senior citizen investment options don’t get safer than a fixed deposit. But did you know senior citizens get preferential rates (in most cases, a 0.5% higher rate) on their deposit? Yes!
What’s more, you get fixed returns on the deposited sum, which is better than most savings instruments. You can go for the non-cumulative option to get interest payments at a pre-agreed interval. Or settle for the cumulative option to get a corpus when your tenure ends. However, ROI will vary from one bank to another, so pick wisely.
Additional Read: Should Millennials Already Be Planning for the Retirement Funds?
3. Debt mutual funds
Once you hit 60, keeping pace with the stock market is difficult. This is why debt mutual funds are great options during your golden years. With consistent returns and professional management, you can grow your corpus yearly.
To do so, go for a Systematic Withdrawal Plan to collect a fixed or variable income at your desired interval, i.e., monthly, quarterly, etc.
4. Post Office Monthly Income Scheme (POMIS)
If you miss the safety of a regular income after retirement, you can consider POMIS by the Indian Department of Post (DoP). You can invest up to Rs. 4,50,000 individually and Rs. 9,00,000 jointly to draw a monthly income in interest payments.
POMIS has a maturity period of five years. However, if needed, you can withdraw the invested amount prematurely. But only after a year into the tenure. You may need to pay a penalty fee as well.
Additional Read: Top Ways to Generate Regular Incomes during Your Retirement Life
To make your hard-earned savings work for you, make sure to perform due diligence. Research and compare different mutual funds schemes to find the best profile fit. Plan the perfect life for your golden years with the Moneyfy app.