The Buyt Desk
Senior citizens looking for regular income prefer to invest in schemes that pay them a higher interest rate and good return. Therefore, they choose to invest their corpus in investment schemes like FDs, Post office saving schemes, and others. However, various banks and the government have cut down the interest rates on these schemes drastically, which is a setback to them. Further, experts say that higher interest rates on saving schemes will not sustain in the coming time. In this scenario, senior citizens must look for better ways to park their money.
Here we suggest five investment options that can give attractive returns to senior citizens.
Senior Citizen Saving Schemes (SCSS)- Senior citizen saving scheme is popular among senior citizens because of its attached benefits. An investor can invest money in this scheme for five years and reap its benefits. One can open multiple accounts in this scheme, but the maximum amount one can invest should not be over 15 Lakhs in total. The government fixes the interest rate of this scheme every quarter, and investors get the interest amount for the whole year.
Note – Interest earned from SCSS is taxable as income from other sources.
Post Office Monthly Income Scheme (POMIS) – POMIS is the post office five-year saving scheme offering an interest rate of 6.6% per annum. One can open multiple POMIS accounts and invest up to 4.5 Lakhs in a single and 9 Lakhs in a joint account.
Note – The investor receives interest as a monthly payout from the scheme. The interest earned is taxable.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) – The government has extended this scheme up to 2031, 31 March. It is also a profiting investment scheme for senior citizens as it provides a guaranteed pension at 7.40% per annum, which is paid monthly. It is a ten-year investment scheme where an investor can invest up to 15 Lakhs.
Note – The interest rate of this scheme is not fixed and get reset every April 1st.
Floating Rate Saving Bonds – The tenure of this scheme is seven years, and its interest rate changes every six months. The interest is paid out to investors twice a year, i.e. January 1st and July 1st. The scheme has an interest rate of 7.15%, and there is no cap for the investment amount.
Note – The interest earned through this scheme is fully taxable
Bank Fixed Deposits – Banks FD has always been the best choice for low risk-taking investors, like senior citizens. Most banks give a 6% interest rate on FDs for the tenure of 5-10 years and give investors an option to take the payout monthly, quarterly and annually. Some Cooperative banks and small finance banks provide 7% interest on senior citizens FD.
Whilst the interest rate is falling for popular and secure investment schemes, senior citizens can still earn a better interest rate by investing in less known saving schemes. Collect more insight into these schemes before choosing one for yourself.
