Senior citizens investment options with guaranteed regular income. Check details
A look at some of the investment options where senior citizens can park their hard-earned money to get a guaranteed regular income
Amid the Covid-19 pandemic, the banks had reduced the interest rates. Senior citizens looking for fixed regular income were hit the most in this falling interest rate scenario. Top banks, including State Bank of India (SBI) offer maximum 6.2% to senior citizens on their fixed deposits with a tenure between 5-10 years, post office small savings schemes provide relatively higher rate. So let's take a look at some of the investment options where senior citizens can park their hard-earned money to get a guaranteed regular income.
Senior Citizen Saving Scheme (SCSS)
Senior Citizens Savings Scheme (SCSS) is a government-run small savings product which currently offers 7.40% per annum. SCSS has a tenor of five years, which can be extended by another three years. However, the upper limit for investing in SCSS is ₹15 lakh. SCSS suits senior citizens looking for a high fixed rate of return and a regular income on a quarterly basis. Investment in SCSS is also eligible for tax deduction up to ₹1.5 lakh per annum under Section 80C of the Income-tax Act, 1961.
Interest rate: 7.4 per cent
Payable: Quarterly
Tenure: 5 years
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Special fixed deposit (FD) scheme for senior citizens
Bank fixed deposits have always been a popular choice for most senior citizens. Bank FDs offer monthly, quarterly, half-yearly or annual interest rate payouts. Some banks like SBI, ICICI Bank and HDFC Bank offer special deposits to senior citizens on deposits of 5-years and above. These special FDs are effective till 30 June 2021. Most Small Finance Banks are offering an interest rate of above 7 per cent on some of their tenure to senior citizens.
Interest rate: More than 6% and above 7% in some Small Finance Banks
Payable: Monthly, quarterly, half-yearly or annual interest
Tenure: 5 years to 10 years
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
PMVVY (Pradhan Mantri Vaya Vandana Yojana) is a retirement cum pension scheme for senior citizens. The scheme is operated and managed by Life Insurance Corporation (LIC). PMVVY scheme has been extended up to 31 March 2023. At present, the scheme is providing guaranteed pension at 7.40% per annum payable monthly.
Interest rate: 7.4 per cent
Payable: Monthly
Tenure: 10 years
Post Office Monthly Income Scheme (POMIS)
The Post Office Monthly Income Scheme (POMIS) has a tenure of 5 years and once invested the interest rate continues to remain the same till maturity. Currently, for the quarter ending June 2021, the interest rate is 6.6 per cent per annum.
Interest rate: 6.6 per cent
Payable: Monthly
Tenure: 5 years
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