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INVESTMENTS FOR PEACEFUL RETIRED LIFE
Normally Ā a retiree , who is dependent Ā on the income derived Ā from his Ā retirementĀ benefits Ā , looks for Ā a Ā safe and secure Ā investment . If he / she draws pension ,Ā the investment return will be an additional income . Otherwise it will be his / herĀ sole incomeĀ . Naturally they look forĀ safe and secure investment avenues , avoidingĀ Ā risky investments , even if theyĀ Ā do notĀ Ā offer better returns .Ā Ā
One avenue for investment isĀ Ā financial instruments like bank deposits , post office deposits,Ā mutual funds ,Ā and sharesĀ . Other avenueĀ is to invest in commodities , gold and real investmentĀ .Ā While the first optionĀ Ā has better liquidity ,Ā the secondĀ Ā avenueĀ may yieldĀ higher returnĀ with restricted liquidity .Ā Ā This article explores only the financialĀ investments .Ā Further it suggests only lowĀ riskĀ options and stock market investmentĀ Ā which carry high risksĀ is not suggested forĀ the senior citizens .Ā Risk-free Investments ?
There is no 100 % riskĀ freeĀ investmentĀ . Even keeping cash in your house also carries risk . But Bank depositsĀ Ā , especially with public sector banksĀ Ā are considered safestĀ Ā .Ā
ButĀ episodes involving banks like PMC Bank , Yes BankĀ , Lakshmi Vilas BanksĀ Ā haveĀ also proved that even bank depositsĀ are not foolproof .Ā Ā During recentĀ yearsĀ , many events took place in IndiaĀ that shatteredĀ Ā the confidence of investorsĀ Ā .Ā PMC Bank was put on moratorium by RBIĀ and investors are still waiting for the return of their depositsĀ .Ā Ā Yes Bank was put underĀ moratoriumĀ andĀ restarted with new management .Ā Ā Lakshmi Vilas bank administration was handedĀ over to Singapore based DBS Bank .Ā KarvyĀ securitiesĀ Ā were bannedĀ by SEBIĀ andĀ Ā customers dealing with them are sufferingĀ Ā .Ā M/S Franklin Templeton Mutual fundsĀ decided to wind upĀ some fundsĀ prematurelyĀ Ā and investorsĀ had to waitĀ for refundsĀ . It all proves that no investment is 100 %Ā Ā safe .Ā As we cannot avoidĀ risks , it's better to spread risks acrossĀ variousĀ assets .Ā āĀ So you chose your investments according to your needs .Ā Any how do not put all eggs in one basket and try to diversifyĀ in to three or four investment channels .Ā If you have penchant for taking risks , limitĀ your suchĀ investments in equities / mutual funds toĀ Ā certain percentage of your investments .Ā āNow let us look inĀ to various low riskĀ Ā investment avenuesĀ available to usĀ Ā andĀ Ā returns we get on them .Ā BEST INVESTMENT PLANS FOR SENIOR CITIZENS
BANKĀ FIXED DEPOSITSĀ ā
Bank deposits are Ā most popular investment plans as they Ā assure Ā Ā good returns with Ā safety Ā of investment . Ā But in the lastĀ 10 years Ā , the deposit interest Ā rates Ā of the banks have shown declineĀ but for the last threeĀ monthsĀ Ā where we are seeing raiseĀ .Ā
Ā Up to Rs 50,000Ā of bank interest is tax free for senior citizens under the old tax regimeĀ Ā andĀ additional interest earned will be added to taxable incomeĀ of the deposit holderĀ .Ā Bank deposits are guaranteed by DICGC up to Rs 5.00 lakhs now .Ā PresentĀ Interest ratesĀ for Bank Deposits for 5 yearsĀ maturityĀ Ā are :Ā āFOR 5 YEAR DEPOSITSĀ āA.Ā Ā Public sector banks pay between 6.50Ā %Ā to 7.50Ā %Ā for senior citizensĀ B.Ā PrivateĀ sector banks pay betweenĀ 6.25Ā %Ā toĀ 8.00Ā %Ā for senior citizensĀ Ā .Ā āā Ā C.Ā Small finance banks payĀ Ā betweenĀ 6.75Ā % toĀ 8.75Ā %Ā for seniorĀ citizensĀ .ā There are NBFC companies , co-operative societiesĀ and corporates who pay higher interest rates , butĀ have higher risk weight-ages .Ā SPECIAL DEPOSITSĀ FOR SENIOR CITIZENSĀ Some banks haveĀ introduced special deposit schemes for senior citizensĀ and are offering additional interest rates for deposits of periodĀ above 5 yearsĀ āSenior citizens also have option of investingĀ inĀ Government backed investment schemes ,Ā NBFCĀ / Corporate bondsĀ and debt Mutual funds, which we explore belowĀ āāĀ Ā For latest bank interest ratesĀ , CLICK HEREĀ
Compare Fixed Deposit Interest rates offered by various banksĀ before investingĀ Ā
ā VISITĀ :Ā Ā Ā LATEST BANK DEPOSIT INTEREST RATES - AĀ Ā COMPARISONĀ āĀ FOR NEWS ON INTEREST RATE CHANGESĀ ,Ā CLICK HEREĀ ā
GOVERNMENT BACKED Ā INVESTMENT AVENUESĀ Ā ā
SENIOR CITIZEN SAVINGS SCHEME Ā Ā ( SCSS )Ā Ā :Ā
ā The scheme is Ā operated by Indian post Ā and available Ā in post offices Ā throughout India .Ā Ā TheĀ scheme is alsoĀ operated throughĀ Ā Public sector banks andĀ selectedĀ private sector banksĀ . A senior citizen Ā can invest a maximum of Rs 30Ā lakhs Ā in the scheme Ā . Maturity after 5 years Ā with an interest ofĀ 8.20Ā % Ā Ā quarterly compounded and interest payable quarterly Ā .Ā Ā Ā āFor the details of the scheme , CLICK HEREĀ NATIONAL SAVINGS CERTIFICATEĀ Ā :Ā The scheme is Ā operated by Indian post Ā and available Ā in post offices Ā throughout India . Ā Investment in the scheme Ā gets tax rebate under 80 c of the income tax act . Ā Scheme is for 5 years Ā . Interest at 7.70Ā % Ā pa and payable only on maturity .Ā TIME DEPOSIT ACCOUNT WITH POST OFFICE :Ā One can deposit any amount Ā and a deposit of 5 years fetches Ā interest ofĀ 7.50Ā Ā % Ā with annual payment of interestĀ MONTHLY INCOME Ā SCHEME OF INDIAN POST Ā ( MIS )Ā Ā The scheme is Ā operated by Indian post Ā and available Ā in post offices Ā throughout India . One can invest a maximum of Rs 4.5 lakhs Ā Ā in the scheme . Ā Maturity after 5 years with an interest ofĀ 7.4Ā Ā % pa Ā with monthly payment of interest . Ā Ā KISAN VIKAS PATRA Ā ( KVP )Ā Ā The scheme is Ā operated by Indian post Ā and available Ā in post offices Ā throughout India . Ā Ā The scheme is for 115 months and fetchesĀ 7.5Ā % Ā pa and payable only on maturity .Ā ā āĀ Ā TO HAVE FULL DETAILS OF ALL FIXED INCOME PLANSĀ Ā , CLICK HEREĀ ā
TAX PLANNING FOR FY 2023-24 ( AY 2024-25 )Ā
Comprehensive Ā Article on Income tax changes in Rules, Rates , Slabs , Rebates Ā and EstimationĀ ā CLICK HERE TO READĀ ā ā HEALTH INSURANCE PLANSĀ FOR SENIOR CITIZENSĀ ā WITH OR WITHOUT ENTRY AGE RESTRICTIONĀ Ā TOĀ READ THE ARTICLE CLICK HEREĀ ā
NBFC / CORPORATE DEPOSITSĀ Ā :Ā
Some of the reputed Non- Banking Finance companies like Shriram transport finance , Bajaj Finance , Mahindra & Mahindra Finance are offeringĀ up toĀ Ā 9.10Ā Ā %Ā for the seniorsĀ for a Ā deposit for 5 yearsĀ .Ā The amount depositedĀ in these companies will not carry DICGC guarantee .Ā ā For details ,Ā CLICK HEREĀ ā
DEBT MUTUAL FUNDSĀ Ā :Ā
Mutual Funds do not Ā guarantee any fixed return Ā or safety of capital , unless they are Ā capital Ā protected funds Ā . Any how return is not guaranteed .Ā FewĀ of the capital protected funds Ā have yielded earlierĀ up to 13Ā %Ā annuallyĀ , but manyĀ have failed to yield any returns on theirĀ Ā investmentĀ Ā . Some of the top ranked Ā debt mutual funds had also yielded aroundĀ 8% pa to 13 % paĀ in lastĀ five yearsĀ yearsĀ āĀ . ButĀ episode withĀ Ā Leading Mutual FundĀ M/S Franklin Templeton Mutual fundsĀ Ā has shaken the investors'Ā faithĀ outĀ Ā from debt mutual funds alsoĀ Ā . TheĀ mutual fund houseĀ decided to wind upĀ someĀ Mutual Fund schemesĀ Ā prematurelyĀ and investors waiting for the release of their invested funds .Ā ā
Ā PLAN FOR CONTINGENCIESĀ Ā Ā Ā CLICK HERE TO READĀ ā
TAX REBATES TO SENIOR CITIZENS ON INTEREST EARNING
INVESTMENT & INCOME TAXĀ Ā Ā :Ā
Ā Old tax regime aloneĀ carries tax rebates for theĀ Ā investments made by the senior citizens .Ā Income taxĀ for Senior Citizens are exempted up to Rs 50,000 interest incomeĀ from banks / post officesĀ under Section 80Ā TTB of Income Tax ActĀ Ā .Ā Rebate under 8OC can be availed forĀ Investment made in insurance premium /Ā PPF /Ā NSC etcĀ for an amount up to Rs 1,50,000 .Ā Ā Long Term Capital gainĀ Ā fromĀ Debt MF held for more than 3 years taxed at 10 %Ā andĀ Profit fromĀ Debt MFĀ held less than 3 yearsĀ Ā will be addedĀ to the taxable income of the holder .Ā
INVESTMENT DECISION YOU HAVE TO TAKEĀ ā
Before making any investment , please study your requirement of safetyĀ , liquidityĀ and return .Ā AĀ corporate bond mayĀ yield higher return , but it may not haveĀ Ā liquidity . You may not be able to encash in case of needĀ .Ā Bank deposit may be secure and offer liquidity , but yield may be less .
Ā Ā āHAPPY INVESTINGĀ ā
TO KNOW Ā ABOUT Ā TAX ON RETIREMENT BENEFITS Ā ,Ā CLICK HEREĀ
āTO KNOW ALL ABOUT IT RETURNS Ā ,Ā CLICK HEREĀ Ā āHOW TO LINK AADHAR TO PAN ? Ā Ā CLICK HEREĀ PLAN YOUR FINANCE PRUDENTLY Ā . For Financial Planning ,Ā CLICK HEREĀ FIXED INCOME PLANSĀ Ā Ā Ā Ā Ā Ā PRECAUTIONS WHILE INVESTING IN STOCK MARKET ā FORĀ LATESTĀ INCOME TAX NEWS Ā CLICK HEREĀ Ā Ā Ā Ā FOR NEWS ON INTEREST RATESĀ Ā CLICK HEREĀ ā
DISCLAIMERĀ Ā :
No content on this blog should be construed to be investment advice. You should consult a qualified financial advisor prior to making any actual investment or trading decisions. All information is a points of view Ā of the author , and is for educational and informational use only. The author accepts no liability for any interpretation of articles or comments on this blog being used for actual investments. Point of view expressed by the author Ā is solely of the author and not of Ā the website .
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MANJUNATHAN BELLURĀDGM ( RETD ), INDIAN OVERSEAS BANKĀ |