Retirement generally means the end of a steady income flow. Therefore, it is wise to invest in a secure retirement plan rather than being dependent on others after retirement. Secure investment options for retirees are the ones that provide sufficient and risk-free returns.
Planning for retirement in advance is a smart move as it ensures your future and financial stability. Let us see some of the best senior citizen investment options available in the market today. You may also suggest these risk-free plans to your parents who are about to retire.
Senior Citizen Saving Scheme
Senior Citizen Saving Scheme is an investment instrument designed especially for retirees and attracts interest rates of up to 9.2 percent. It allows an investor to invest anything between INR 500 to INR 15,00,000.
SCSS comes with a fixed tenor of 5 years which can be further extended by three years. It is a risk-free investment that provides high returns as well.
You can apply for this savings scheme by just filling out a form and submitting relevant documents. As a result, the senior citizen saving scheme is a hassle-free and attractive investment option for retirees.
Senior Citizen Fixed Deposits
Senior Citizen Fixed Deposit is one of the most flexible and secure investment options for retirees. Company FDs offer higher interest rates as compared to bank FDs. You also have the flexibility to choose tenor and interest payout frequency. You can either earn the returns periodically with non-cumulative FD or gain a lump-sum return upon maturity with the cumulative FD option. In times of financial or health emergencies, you can pledge your FD and raise a loan against it at a nominal interest rate.
FD investments can be started with a minimum investment amount of Rs. 25000. You can calculate your returns in advance using the Fixed Deposit Maturity amount Calculator. With guaranteed returns and high-interest rates, these deposits prove to be one of the best risk-free investments for retirees. You can invest your PF corpus into FD to ensure you get guaranteed, positive returns even during peak inflation.
POMIS (Post Office Monthly Income Scheme)
POMIS enables an individual to invest Rs. 4.5 lakh for a single account. For joint accounts, the principal amount can go up to Rs. 9 lakhs. It is a safe investment option for retirees since it is secured by Government policies.
The interest rates are up to 7.8 percent, and the returns are not affected by changing market conditions. You can also collect your returns directly into a savings account for your convenience. Though a reliable investment option, the income generated through this scheme is taxable.
Investing in real estate is a lucrative option. The introduction of laws like RERA by the Government of India has further made it easy and secure to invest in real estate.
You can buy a property and rent it until its cost gets covered. The value of the property increases with time, and the rent will prove to be your steady income source after retirement.
If you are looking for a tax-free investment option, then tax-free bonds can be a good option for you. Tax-free bonds are the bonds issued by GOI (Government of India) to raise capital for a particular project.
The tenor for these bonds can range from 10 to 30 years as it depending on the schedule of the project. The returns of these bonds are exempted from tax and go as high as 7.5 percent.
Retirees can invest in these bonds and earn surplus returns to fund their post-retirement plans. A maximum of Rs. 10 lakhs can be invested in tax-free bonds. These bonds are offered by organizations like NTPC, Railways Finance Corporation, etc. to investors who are interested in earning through long-term investments.
These are some of the best risk-free investment schemes in the market today. Senior Citizen Fixed Deposit scheme offers an interest rate of up to 8.95 percent, which is one the highest in the Indian market. You can track and manage your FD earnings through Experia- your online fixed deposit account. Retirees can choose monthly, quarterly, annual, or bi-annual payout as per their convenience.