After 60 years of age, the source of income is limited.
Senior Citizen Investment options 2020: Amidst the coronavirus epidemic, the interest rates of deposits are coming down along with the reduction in loan interest rates. Whether bank FD’s or post office small savings schemes, interest on deposits has reduced in all. They can be cut even further. This means that now your income through interest on deposits will be affected. This will have a significant impact on the senior citizen ie senior citizens. After 60 years of age, the source of income is limited. If you have income from pension then you will get regular money every month. Apart from this, you will get return on your investment made. Along with this, it is also important for senior citizens to invest their accumulated capital so that they get more or less good returns, money is also safe and there is benefit of tax exemption as well.
Some schemes have been created by the government and banks, in which senior citizens can get more benefits and save tax and deposits are more or less safe against other options. Some of the post office schemes are very popular among them, these include Senior Citizen Savings Scheme (SCSS), Post Office Monthly Income Scheme (MIS), 5-year FD, Vyavan Yojana Scheme of the Government, Public Provident Fund (PPF) is.
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Post Office Senior Citizen Savings Scheme (SCSS)
In the post office senior citizen savings scheme, a deposit can be made in multiple of 1000 rupees. Also, there can be no more than 15 lakh rupees in it. At present, the interest is 7.4 per cent, the maturity period is 5 years. Under SCSS, a person 60 years of age or older can open an account. If someone is 55 years or more but less than 60 years old and has taken VRS, then he can also open an account in SCSS. But the condition is that he has to open this account within one month of getting the retirement benefits and the amount to be deposited in it should not be more than the amortization of the retirement benefits.
Under SCSS, the depositor can also keep more than one account at the joint with individual or his wife / husband. But together with all, the maximum investment limit cannot be more than 1.5 million. Premature closure allowed. But the post office will deduct 1.5% of the deposit only after closing the account after 1 year of account opening, while after closing after 2 years, 1% of the deposit will be deducted.
After completion of maturity period, the account can be extended for another three years. For this, application has to be given within one year of the maturity date. Talking about tax, if your interest amount exceeds Rs 10,000 annually under SCSS, then your TDS gets deducted. However, investment in this scheme is exempt under Section 80C of the Income Tax Act.
Post Office Monthly Income Scheme (MIS)
Post office MIS can also be a good option for senior citizens. It can be invested with a minimum amount of 1000 rupees. The maximum investment limit for a single account holder is Rs 4.5 lakh and Rs 9 lakh at the joint. The current rate of interest on this is 6.6 percent per annum.
This interest can be acquired in a savings account on a monthly basis, which can become a lump sum monthly income. Any number of accounts can be opened in any post office, but the maximum investment including all MIS accounts will be Rs 4.5 lakh.
The maturity period of this account is 5 years. MIS account can be prematurely encashed after one year. But before the completion of 3 years of opening of the account, 2% of the deposit will be deducted if it is included prematurely. At the same time, after completing 3 years, it will be cut by 1 percent.
Fixed Deposit (FD)
Fixed deposits have always been a traditional investment option in the country. At present, banks pay more interest to senior citizens on FD investment. At the same time, there is also the benefit of tax reduction on 5-year FD. In such a situation FD can become a good option for senior citizens. Currently, FD interest rates in the country’s largest bank SBI range from 2.90 per cent to 5.40 per cent per annum at different maturities. While the interest rates for senior citizens are up to 6.20 percent annually. Apart from banks, one can also invest in post office FDs.
SBI is paying 6.20% interest to the senior citizen on 5-year tax saver FD. Similarly, interest rates on FDs in PNB are up to 6.25 per cent per annum for senior citizens, up to 6.30 per cent in ICICI Bank and Bank of Baroda, up to 6.25 per cent per annum in HDFC Bank. You can open FD with different interest rates by choosing FD rates of different banks or according to your convenience. However, it should be noted that tax is to be paid on the amount received on maturity of FD.
Pradhan Mantri Vaya Vandan Yojana (PMVVY)
Pradhan Mantri Vayu Vandan Yojana (PMVVY) is being run for senior citizens only. The Central Government provides grants for this scheme. Recently it has been extended for 3 years i.e. till 31 March 2023. At the same time, the Central Government has revised the scheme to 7.40 per cent per annum for FY 2021.
PMVVY is a pension scheme for senior citizens. Senior citizens get a guaranteed pension at a fixed rate for 10 years in the scheme after opting for the pension option. The scheme also offers death benefit. Under this, the purchase price is refunded to the nominee. Under the PMVVY scheme, a maximum investment of Rs 15 lakh can only be done. There is a system of taking pension on a monthly, quarterly, half-yearly and yearly basis.
Lump sum money can be invested in this scheme. As per the current rates, the scheme will have a minimum pension of Rs 1000, Rs 3000 quarterly, Rs 6000 half yearly and Rs 12,000 annual pension. A person who has completed 60 years of age can invest in PMVVY. There is no maximum age limit. For this, you can apply both online and offline.
Investment in post office 100% safe, only 5 lakh in bank
Investing in the post office i.e. post office is completely safer than the bank. In case of default of the bank, insurance is guaranteed up to Rs 5 lakh deposited in it. This guarantee is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC) bank customers. Whereas, post office savings schemes are operated under the Ministry of Finance. Therefore, the government has sovereign guarantee on the money deposited in it. The government also uses the money deposited in small savings schemes of the post office.
