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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 retiremeānt 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 they are offered better returns .Ā
EDITOR'S NOTE datedĀ 29.08.2022Ā : .Ā Ā Since ourĀ last note dated 03.03.2022Ā ,Ā Ā RBI has hiked itsĀ Repo RatesĀ threeĀ times with a totalĀ hike of 1.4 %Ā Ā Ā and presently Repo rate isĀ Ā atĀ 5.4 %Ā Ā .Ā The growth of Indian economyĀ which was slowing down in the last year , has picked up now .Ā Ā As aĀ consequenceĀ of these hikes ,Ā Ā all financial institutionsĀ Ā are also hikingĀ their interest ratesĀ Ā for theirĀ Ā depositsĀ .Ā The hike has caught upĀ withĀ all types of banksĀ Ā and NBFC Fixed Deposits .Ā However government is yet to hikeĀ Ā small savings interest rates (Ā Ā Ā post office depositsĀ Ā ) .Ā Ā To knowĀ Ā about the latest interest rates offered , continue to read the articlesĀ
EDITOR'S NOTE datedĀ 03.03.2022Ā : .Ā DuringĀ 2022,Ā RBI has not changedĀ Ā Repo RateĀ which is atĀ 4 %Ā Ā .Ā The growth of Indian economyĀ which was slowing down in the last year , has picked up now .Ā With aĀ warĀ raging between Russia & UkraineĀ Ā ,Ā it looks inflation is catching the worldĀ Ā along with IndiaĀ . Along withĀ Ā prices , it's afraid that interest rates may flare up in coming daysĀ . HenceĀ possibilityĀ ofĀ gettingĀ higher interest rateĀ from fixed income plans like Bank DepositsĀ in the coming timesĀ isĀ lookingĀ more possibleĀ . Already four Indian Banks are paying 7 % or moreĀ Ā for 5 year depositsĀ .Ā
EDITOR'S NOTE datedĀ 18.01.2022Ā : This blog article is updated after 12 monthsĀ .Ā DuringĀ Ā theĀ periodĀ Ā Repo RateĀ Ā has steadied atĀ 4 % withoutĀ any changeĀ .Ā The growth of Indian economyĀ which was slowing down in the last year , has picked up now . . With the advent pandemicĀ COVID -19 problem ,Ā Indian economyĀ has goneĀ into recession along with global economy .Ā However economy isĀ bouncing backĀ Ā .Ā Ā Ā But possibilityĀ ofĀ getting any higher interest rateĀ from fixed income plans like Bank DepositsĀ in the current year is still lookingĀ remote .Ā
EDITOR'S NOTE datedĀ 04.01.2021Ā : This blog article is updated after 7 monthsĀ .Ā DuringĀ Ā theĀ periodĀ Ā Repo RateĀ Ā has steadied atĀ 4 %Ā Ā .Ā The growth of Indian economyĀ Ā was slowing down in the last year . With the advent pandemicĀ COVID -19 problem ,Ā Indian economyĀ has goneĀ into recession along with global economy .Ā However economy isĀ showingĀ signs of possible recovery in coming monthsĀ . Anyhow possibilityĀ ofĀ getting any higher interest rateĀ from fixed income plans like Bank DepositsĀ in the current year has become remote .Ā Ā
EDITOR'S NOTE datedĀ 29.05.2020Ā : This blog article is updated almost after aĀ yearĀ .Ā DuringĀ Ā the yearĀ Repo RateĀ Ā has come downĀ continuously with every RBI MPC meeting .Ā Ā Now itĀ Ā is 4 %Ā Ā .Ā The growth of Indian economyĀ Ā was slowing down in the last year . With the advent pandemicĀ COVID -19 problem ,Ā Indian economy isĀ on the verge of recession along with global economy .Ā PossibilityĀ ofĀ getting any higher interest rateĀ from fixed income plans like Bank DepositsĀ in the current year has become remote . Actually many expertsĀ are hinting of interest rates travelling south in further policy statements of RBI .Ā
Hence it would be prudentĀ toĀ Ā checkĀ available interest rates now and act if one wants to go for risk free investmentsĀ ā EDITOR'S NOTE datedĀ 29.05.2020Ā : This blog article is updated almost after aĀ yearĀ .Ā DuringĀ Ā the yearĀ Repo RateĀ Ā has come downĀ continuously with every RBI MPC meeting .Ā Ā Now itĀ Ā is 4 %Ā Ā .Ā The growth of Indian economyĀ Ā was slowing down in the last year . With the advent pandemicĀ COVID -19 problem ,Ā Indian economy isĀ on the verge of recession along with global economy .Ā PossibilityĀ ofĀ getting any higher interest rateĀ from fixed income plans like Bank DepositsĀ in the current year has become remote . Actually many expertsĀ are hinting of interest rates travelling south in further policy statements of RBI .Ā Hence it would be prudentĀ toĀ Ā checkĀ available interest rates now and act if one wants to go for risk free investmentsĀ 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 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 āA.Ā Ā Ā Public sector banks pay between 5.25Ā % toĀ 5.75Ā Ā %Ā for 5 year term deposits ( 5.75 %Ā to 6.45Ā %Ā for senior citizens )Ā Ā .Ā Ā Ā UnionĀ Ā Bank of IndiaĀ & Canara Bank are payingĀ highestĀ interestĀ rate of 5.75Ā Ā %Ā for the public andĀ Ā State Bank of India isĀ Ā paying highest interest rateĀ Ā Ā @ 6.45 %Ā for the senior citizensĀ Ā ā B.Ā PrivateĀ sector banks pay betweenĀ 5.40 % to 6.75Ā %Ā for 5 year term deposits ( 5.90 %Ā toĀ 7.50Ā %Ā for senior citizens )Ā Ā .Ā Ā Indusind BankĀ Ā andĀ Yes Bank areĀ paying highest interest rateĀ ofĀ 6.50 %Ā for the publicĀ andĀ Ā i @Ā Ā Ā 7. 50 %Ā for the senior citizensĀ .Ā ā Ā C.Ā Ā Small finance banks payĀ Ā betweenĀ 5.50Ā % toĀ 7.50Ā % for public andĀ 6.00Ā Ā % toĀ 8.25Ā Ā %Ā for seniorĀ citizensĀ .Ā Ā UtkarshĀ Ā Ā SF BankĀ pay highest ofĀ 7.50Ā %Ā for the public andĀ Ā 8.25Ā Ā % for the senior citizens .Ā āā 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 15 lakhs Ā in the scheme Ā . Maturity after 5 years Ā with an interest ofĀ 7.4 % Ā Ā quarterly compounded and interest payable quarterly Ā .Ā Ā Ā āFor the details of the scheme , CLICK HEREĀ Ā LIC PRADHANA MANTRI VAYA VANDANA YOJANAĀ The scheme is Ā operated by Ā Life Insurance Corporation of India Ā . Ā The scheme is Ā for 10 years Ā and fetches interest rate ofĀ 7.4Ā % pa . Interest in form of pension is payable monthly Ā . Ā A maximum amount of Ā RsĀ 15Ā lakhs can be invested Ā by senior citizens .Ā For the details of the scheme ,Ā CLICK HEREĀ GOIĀ FLOATING RATEĀ SAVINGSĀ ( TAXABLE ) BONDĀ ā The bonds issued by Reserve Bank of India and are sold through SBI , Nationalised Banks and few private sector banks like ICICI , HDFC etc . Ā Bond is issued for a period of 7 years .Ā Interest (Floating)Ā āĀ Ā The interest on the bonds will be payable at half yearly intervals on Jan 1st and July 1st every year. There is no option to pay interest on cumulative basis.Ā The coupon rate will be linked/pegged with prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate.Ā Ā Presently the rate works outĀ 7.15 % .Ā āāFor the details of the schemeĀ ,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 6.8 % 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 6.7Ā % 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 6.6Ā % 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 6.9 % 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 2022-23 ( AY 2023-24 )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 8 .75Ā %Ā for the seniorsĀ for a Ā deposit for 5 yearsĀ . 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 . Some of the capital protected funds Ā have yielded earlier Ā around 6 % to 7 % Ā . Some of the top ranked Ā debt mutual funds had also yielded aroundĀ 7 % pa to 9 % paĀ in lastĀ five yearsĀ yearsĀ āĀ . ButĀ Ā recent 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
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 Episodes involving banks like PMC Bank , Yes BankĀ , Lakshmi Vilas BanksĀ Ā has also proved that even bank depositsĀ are not foolproof .Ā Ā During the last one yearĀ , 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 are waiting for refundĀ . It all proves that no investment is 100 %Ā Ā safe .Ā If you areĀ a tax payerĀ , taxĀ rebates are available to seniorĀ 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 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 |