To understand what is an investment, think of it as a means to grow your savings. Managing finances after retirement can be challenging if you have not saved enough money till then. To ensure a steady flow of income after retirement, senior citizens should focus on instruments that offer periodic returns. On the other hand, they cannot compromise on safety and stability by investing in high-risk instruments. These are the five safe investment options that can offer considerable returns after retirement:
PMVVY
Pradhan Mantri Vay Vandana Yojana is a retirement scheme that allows you to invest between Rs. 1,50,000 and Rs. 15,00,000 per year. It comes with a tenor of 10 years after which you will receive a pension along with the invested amount.
Pension payouts can be received after every month, quarter, year, or six months as per your choice. However, be patient as the pension and the invested amount can be withdrawn only after the tenor completion.
POMIS
Post Office Monthly Income Scheme allows you to earn a fixed amount every month after retirement. As it is a government-sponsored scheme, it is safe. You can invest an amount starting from Rs. 1500 in POMIS. The maximum investment limit is Rs. 4,50,000 whereas you can invest up to Rs. 9,00,000 every year if you open a joint POMIS account.
However, it comes with a fixed tenor of 5 years and partial withdrawals are allowed only after completing one year from the investment date.
SCSS
Senior Citizen Saving Scheme is a high-return instrument that allows you to invest up to Rs. 15,00,000 per year. It comes with a tenor of 5 years and enables you to renew it by another 3 years if needed. Early withdrawals are permitted only after completing one year of investment.
Debt Funds
If there is any scope of taking risks after retirement, go for the debt funds instead of stocks. They are safer because your invested capital goes into fixed-income instruments and offers higher returns over a longer tenor. However, as you cannot withdraw your funds immediately during a financial crisis or emergency. Therefore, you also need to think of instruments that come with better liquidity options.
Senior Citizen Fixed Deposits
Investing in Senior Citizen Fixed Deposits is safe and can offer high returns if you invest smartly. For example, Bajaj Finance FD offers a 0.25% higher FD interest rate to citizens who are above 60. An interest rate of up to 6.75% ensures that you earn steady returns post-retirement. The features that make it stand apart from other investment options are listed below:
Interest payouts
Bajaj Finance FD comes with monthly, yearly, bi-annual, and quarterly interest payouts. Therefore, you can choose it if you need an instrument that generates regular income.
Online FD
Investing in this FD scheme is seamless due to the FD form and online document verification facilitated by the CKYC process. You can even pay for the deposits via net banking, debit card (in certain locations only), and UPI.
Loan against deposits
Managing emergencies with Bajaj Finance FD is easy. It is because you can withdraw your deposits once they complete 3 months. Also, a loan can be obtained against them if you want to keep your deposits growing.
Invest in this FD scheme as CRISIL and ICRA have rated it highly for ensuring safety for the depositor's money.
Life after retirement can be challenging if you don't have a stable income source. Also, you cannot put your investments at risk by investing in market-linked instruments. Investments like NPS, PMVVY, SCSS offer stability to your invested capital. If you have the risk-taking ability, go for debt funds instead of equities. Investing in Bajaj Finance FD is a smart idea as it offers a 0.25% higher FD rate of interest. The higher FD rate allows you to earn considerable interest whereas you have the option of choosing periodic interest payouts by investing in non-cumulative FDs. To handle a financial emergency, you can apply for a collateral-free loan against your deposits. ICRA and CRISIL, the leading credit rating agencies have rated it highly for securing the depositors' money.
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