9 Key Income-Boosting Investment Options For Senior Citizens In India
For senior citizens in India, finding the right investment option can be a challenge. With so many options available, it can be difficult to know where to start. Fortunately, we’ve compiled a list of 9 key income-boosting investment options for senior citizens in India. From fixed deposits to annuities, there are plenty of ways to ensure a comfortable retirement. Read on to learn more about each option and find the perfect fit for your needs.
Senior Citizen Savings Scheme (SCSS)
The Senior Citizen Savings Scheme (SCSS) is a great income-boosting investment option for senior citizens in India. It offers an interest rate of 8.6% per annum, which is higher than most other investment options available to senior citizens. Additionally, the SCSS offers tax benefits under Section 80C of the Income Tax Act.
The SCSS can be opened with a minimum investment of Rs 1,000 and a maximum investment of Rs 15 lakhs. The scheme has a tenure of 5 years, which can be extended by another 3 years. Withdrawals from the SCSS are allowed after the completion of 1 year from the date of opening the account.
Senior citizens who are looking for a safe and secure investment option that offers good returns should consider investing in the Senior Citizen Savings Scheme.
National Pension System
The National Pension System (NPS) is one of the key income-boosting investment options for senior citizens in India. It was introduced in January 2004 and is open to all Indian citizens between the ages of 18 and 60. The NPS offers a wide range of benefits, including:
• Tax benefits – Contributions to the NPS are eligible for deduction under section 80C of the Income Tax Act, 1961. Additionally, withdrawals from the NPS are tax-free up to a limit of 40% of the total corpus.
• Flexibility – Senior citizens can choose from a variety of investment options under the NPS, including equity, debt, government securities and corporate bonds. They can also choose to receive a lump sum payout or an annuity upon retirement.
• Affordability – The NPS is one of the most affordable pension schemes in India, with low minimum contribution requirements.
• Safety – The NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA), which ensures that investments are made in a safe and secure manner.
If you are a senior citizen looking for an income-boosting investment option, the National Pension System could be ideal for you.
Senior Citizen Fixed Deposits
In India, senior citizens enjoy several benefits and perks, including special interest rates on fixed deposits. If you’re a senior citizen looking for an investment option that will offer you regular income, a fixed deposit account may be the right choice for you.
With a fixed deposit account, you can choose to earn either monthly or quarterly interest payments. The interest rate on your account is guaranteed for the term of your deposit, so you’ll know exactly how much income you can expect to receive. And, unlike some other investment options, your principal investment is always safe with a fixed deposit.
To open a senior citizen fixed deposit account, simply visit your nearest bank branch or give them a call. You’ll need to provide some identification, such as your PAN card or Aadhar card. Once your account is opened, you can choose how much money you’d like to deposit. The minimum deposit amount is typically Rs. 1 lakh (or $1,500).
Once your deposit matures, you can choose to either withdraw the money or reinvest it for another term. Withdrawing your money is easy – just visit your bank branch and request a withdrawal slip. If you decide to reinvest, you can do so without having to go through the application process again.
Whether you’re looking for regular income or a safe place to park your savings, a senior citizen fixed deposit account may be the right investment option for you.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme for senior citizens aged 60 years and above. It offers an assured return of 8% per annum for 10 years. The scheme is open for subscription from 1st May, 2018 to 31st March, 2020.
The minimum investment amount under the scheme is Rs.1,56,658 and there is no maximum limit. The investment can be made in lump sum or in installments. The scheme offers income tax benefits under Section 80C of the Income Tax Act, 1961.
The scheme provides an option to receive pension either monthly or annually. For monthly pension, the frequency can be selected as quarterly, half-yearly or yearly. The purchased annuity plan will mature on the date when the subscriber reaches 80 years of age. In case of death of the subscriber before the maturity date, the purchase price will be refunded to the nominee/legal heir.
The guaranteed return makes this scheme an attractive investment option for senior citizens who are looking for fixed income during their retirement years.
Post Office Monthly Income Scheme (POMIS)
The Post Office Monthly Income Scheme (POMIS) is a great investment option for senior citizens in India. It offers them a regular income, which can be used to supplement their retirement incomes.
POMIS is a government-backed scheme, which means that it is a safe investment option. The interest rate on the scheme is currently 7.6% per annum. This is higher than the interest rates offered on most bank deposits.
Investments in POMIS are eligible for tax benefits under section 80C of the Income Tax Act. Senior citizens can invest up to Rs 15 lakhs in this scheme and avail of the tax benefits.
The minimum investment amount in POMIS is Rs 1,500 and there is no maximum limit. Investors can choose to receive their interest payments monthly or quarterly. The maturity period for this scheme is 5 years.
POMIS is a good investment option for senior citizens who are looking for a safe and secure way to boost their incomes.
Mutual Funds
Mutual funds are a type of investment that pools money from many investors and invests it in a variety of securities, including stocks, bonds, and short-term debt. The benefits of mutual funds include professional management, diversification, and economies of scale.
There are two types of income-boosting mutual funds for senior citizens in India: equity mutual funds and debt mutual funds. Equity mutual funds invest primarily in stocks and aim to provide capital appreciation over the long term. Debt mutual funds invest primarily in fixed-income securities and aim to provide regular income through interest payments.
Both equity and debt mutual funds can be further classified into subcategories based on their investment objectives. For example, large-cap equity mutual funds invest in blue-chip stocks of well-established companies while small-cap equity mutual funds invest in stocks of newer or smaller companies that may be more volatile but have higher growth potential. Similarly, short-term debt mutual funds exist for investors looking for stability and capital preservation, while long-term debt mutual funds exist for investors seeking higher returns through exposure to longer-dated securities. There is no one “best” type of income-boosting mutual fund; the best fund for you will depend on your individual needs and goals.
Before investing in any type of mutual fund, be sure to research the fund’s performance history, fees, and investment objectives to make sure it aligns with your financial
Tax-Free Bond
The government of India offers certain tax-free bonds that are exempt from income tax. These bonds are an attractive investment option for senior citizens because they provide a regular income stream that is not subject to taxation. The interest rate on these bonds is usually higher than the rates offered on other fixed-income securities, making them an ideal choice for retirees who are looking for a higher return on their investment.
Floating Rate Savings Bonds
The Indian government offers a special type of bond for senior citizens, called the floating rate savings bond. These bonds offer a higher interest rate than regular savings bonds, making them an attractive option for income-seeking seniors.
Interest on these bonds is reset every six months, so you’ll always earn the prevailing market rate. And unlike some other investments, there’s no maximum limit on how much you can invest in these bonds.
With a minimum investment of just Rs 1,000, these bonds can be a great way to supplement your retirement income.
Annuity Plans
Assuming that the retired person has a good health condition and life expectancy, an annuity plan is one of the best options for income-boosting investment. It provides a regular source of income for senior citizens in India, which can help to cover day-to-day expenses as well as offer financial security.
There are different types of annuity plans available in the market, which provide different features and benefits. Some of the most popular annuity plans among senior citizens in India are:
1) Immediate Annuity Plan: As the name suggests, this type of annuity plan provides immediate income to the policyholder. The policyholder can choose to receive monthly, quarterly or yearly payments as per their convenience. This type of annuity plan is ideal for those who do not have any other source of regular income and need immediate financial assistance.
2) Deferred Annuity Plan: Under this type of annuity plan, the policyholder does not receive any immediate income. The policy builds up over a period of time and payments start at a later stage, usually after the policyholder reaches 60 years of age. This type of annuity plan is ideal for those who have other sources of regular income and do not need immediate financial assistance.
3) Joint Life Annuity Plan: As the name suggests, this type of annuity plan provides income to two individuals (usually a husband and wife). The payments continue even if one spouse dies during the policy term.
Investment in annuity plans can be a great way to supplement your retirement income. However, do keep in mind that you need to evaluate the different options available before making a final decision. Compare the features and benefits of different annuity plans and choose the one that best suits your individual needs and requirements.
