As an investor, we are in search of earning extra income to meet financial goals. It is quite easy for youngsters and adults to find jobs and work towards generating income easily. But it is quite difficult for senior citizens, a person who is above 60 years of age, with the benefits of a pension.
By prudent financial planning over his active working life, a senior citizen can keep on earning a well-provided means of living enjoy the benefits of retirement without any job. If they invest their income with a financial goal of earning in stable and high earning instruments, they can not only take care of their daily expenditure but also plan for enjoyment. All they need to know is about the opportunities available and the time to invest.
Here are some investment options which every senior citizen must know about:
● Fixed Deposits:
Senior citizens are offered with Senior Citizen Fixed Deposit scheme, which is entirely different from those regular fixed deposit schemes, yielding higher returns. Furthermore, it is highly liquid, and you can withdraw from it at any time during the tenor as a minimal penalty (of 1% is imposed. You can start with a minimum Rs 500 investment with banks and a minimum investment of Rs 25,000 with Bajaj Finance.
- Company deposits like Bajaj Finance offer flexible tenor, which ranges from 12 months to 60 months, you can choose the tenor as per your preference.
- You can opt from cumulative and non-cumulative schemes of payout. Bajaj Finance Fixed Deposit rate is 8.75% for a regular customer, but senior citizens get a special rate of interest, i.e. a hike of 0.35%
● Senior Citizens Saving Scheme:
Senior Citizen Saving Scheme can be started with a minimum investment of Rs 500 up to a maximum of Rs 15 lakh, and you can invest according to your investment objective. The scheme comes with a fixed tenor of 5 years, which can further be increased to 3 years. The scheme offers a high rate of return up to 8.7% currently. This scheme can be availed from any banks or post office. It also offers tax benefit under Section 80C.
● Tax-free bonds:
As the name indicates, these are the bonds that are exempted from the tax irrespective of the tax slab you fall into. These bonds are issued by government institutions such as Indian Railway Finance Corporation, Power Finance Corporation and so on. Before investing in these bonds, you must be aware that these bonds are a long-term investment, maturing after a period of 10, 15, 20 years. Invest in them only if you are sure, you won’t need the money in the near future. And these bonds are not liquid. These bonds are listed on the secondary market to provide an exit route to the investors. Few of such bonds are HUDCO N2 bonds, HUDCO N3 bonds and so on.
● Mutual Funds:
Mutual Funds do not come with any age bars. Anyone who is an adult can invest in these funds with an option of lump sum investment or SIP. This instrument comes in various kinds such as equity fund, balanced fund, sector fund, diversified fund, ELSS and debt funds. This instrument carries features that can meet the demands of all types of investors in accordance with their interest area.
● Non-convertible debentures:
These are secure debt instruments with fixed interest rate and are issued for a fixed tenor. These are raised by companies to fulfil the company’s needs as it falls short of funds. These funds can’t be converted to equity-like that in case of convertible debentures. Generally, NCDs are offered with a rate of return around 9% to 10% depending on the tenor.
● Post Office Monthly Income Scheme:
The scheme as the name suggests can be availed from any post office. You can invest in the scheme with a maximum of Rs 4.5 lakh for single ownership up to Rs 9 lakh for joint ownership. The scheme offers a rate of interest up to 7.8%, with a tenor of 5 years.
These are some of the investment options available for senior citizens. Amongst all these options, fixed deposit is the most reliable option offering fixed returns, flexible tenor, and liquidity. With Bajaj Finance FD, you are even assured of safe and guaranteed returns with ICRA’s MAAA (stable) rating and CRISIL’s FAAA/Stable rating. Hence, your investments are never at risk. With Experia- your online fixed deposit account, FD management, and tracking are easy and hassle-free. Senior citizens can also avail doorstep document pick-up at no additional cost.