Retirement investment Retirement investment options with guaranteed regular income, check here : In the midst of the ongoing pandemic, banks had lowered interest rates. In this falling interest rate scenario, pensioners who were looking for a fixed ordinary income were the most affected. Top banks including the State Bank of India (SBI) offer seniors a maximum of 6.2% on their fixed deposits with maturities between 5-10 years, small savings systems at post offices offer relatively higher prices. So let’s take a look at some investment options where retirees can park their hard earned money to get guaranteed regular income.
Here is a list of some recommended investment options for seniors.
Elderly Savings System (SCSS)
The Elderly Savings Program (SCSS) is a state-run small-scale savings product that currently offers 7.40% per year. The term of SCSS (Senior Citizen Saving Scheme) is 5 years and it can be extended by another 3 years. However, the upper limit for investments in SCSS is Rs 150,000. SCSS is suitable for retirees who demand high returns and regular income every quarter. The maximum tax deduction is also used when you invest in SCSS. 15,000 per year according to section 80C of the Income Tax Act of 1961.
- Interest rate: 7.4%
- Payment: Quarterly
- Term of office: 5 years.
Pradhan Mantri Vayavandana Yojana (PMVVY)
Pradhan Mantri Vaya Vandana Yojana is a pension and retirement system for the elderly. This plan is operated and managed by Life Insurance Corporation (LIC). The PMVVY system has been extended to 31 March 2023. At present, the system offers a guaranteed pension with an annual interest rate of 7.40% monthly payments.
- Interest rate: 7.4%
- Payment amount: Monthly
- Employment period: 10 years.
Post Office Monthly Income Scheme (POMIS)
The Post Office Monthly Income Scheme (POMIS) has a term of 5 years and once it has been invested, the interest rate remains the same until maturity. At present, the interest rate for the quarter ending June 2021 is 6.6 percent per year.
- Interest: 6.6 percent
- Payment: Monthly
- Employment period: 5 years.
Bank fixed deposit
Fixed bank deposits have always been a popular option for most pensioners. Bank FD offers monthly, quarterly, semi-annual or annual interest payments. Some banks such as SBI, ICICI Bank and HDFC Bank offer special deposits to pensioners on deposits of 5 years and up. These special FDs are valid until June 30, 2022. Most of the small financial banks offer an interest rate of more than 7 percent to pensioners on some of their jobs.
- Interest rate: Over 6% and over 7% in some small financial banks
- Payment: Monthly, quarterly, half-yearly or annual interest
- Employment period: 5 years to 10 years.
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