Retirement usually means that you won’t have any regular source of income. However, there are various schemes in which you can invest after retirement. These schemes help in maintaining the liquidity of your cash flow as well as building a sufficient corpus for your other financial goals. Moreover, all these schemes are fully exempted from tax, which also relieves you from the tax liabilities to a great extent. Many retirees sought to invest in market-linked and insurance products. Though they can yield good returns over time, it is always advisable to invest some amount in Fixed Deposits too.
The prime challenge remains over here is to never run out of the funds kept for retirement. Even though you have retired at the age of 58 or 60 years you would still need some money for meeting your other goals like travelling, children’s education, etc. NBFCs like Bajaj Finance offer you the facilities of investing in FDs at an attractive FD interest rates between the range of 8.75% – 9.10% on a flexible tenor of 12 months to 60 months.
Different Options for Senior Citizens in India
Senior Citizen’s Saving Scheme is very beneficial scheme for all the senior citizens aged above the age of 60 years and all the early retirees. The scheme can be availed even from the post office. However, senior citizens must have received their retirement funds within the month before they invest in such a scheme. The tenor of such schemes is five years and it can be extended up to another three years after the maturity of the scheme. The interest rate of SCSS is 8.6% per year which is payable every month and is fully exempted from tax liabilities. The maximum limit to invest in SCSS is 15 Lakhs and users can open more than one account under it.
Post Office Monthly Income Scheme is another scheme for senior citizens under which the maximum investing amount is 4.5 Lakhs for a single account. If the user wants to open a joint account, the maximum limit can be extended up to 9 Lakhs. Currently, the interest rate charged on this scheme is at 7.8% per year. The interest payouts are on monthly basis. Moreover, you don’t have to go to post office each month for receiving the interest, it can be directly deposited to your savings account. Apart from this, it also gives you the option of automatically transferring the amount to a recurring deposit.
Bank Fixed Deposits remain one of the most common choices among the retirees along with the FD services provided by the NBFCs. However, the interest rates of bank FDs are on a downward trend since the last few years. At present, the interest rate stands at 7.25% per year and the tenor ranges anywhere between 1 to 10 years. Whereas, NBFCs provide a better Senior Citizen Fixed Deposit (FD) interest rate ranging above 8% to even 9%. In bank FDs, senior citizens get an additional rate of interest of 0.25% over the normal interest rate. While NBFCs like Bajaj Finance offer an additional rate of interest of 0.35% over the normal rate.
Where to Invest in Fixed Deposits
Leading NBFCs like Bajaj Finance offer an attractive deal where you can invest in FD with an amount as small as Rs. 25000. You also have the option to diversify your amount in multiple FDs so that you can keep earning higher interest. There is a tax-saving FD in which you can invest for a lock-in period of five years which means your amount is safe in the FD for next five years. The application process is quite simple and there is minimum documentation process. You can calculate all your earnings by using an online FD calculator. It makes you understand how much earnings you are going to reap along with the matured amount.