Top 3 Best Investment Options for Senior Citizens

Top 3 Best Investment Options for Senior Citizens after Retirement.

Here I Explain Top 3 Best Investment Options for Senior Citizens after Retirement of 60 Year-Old Age. We will Cover Best Government Investment Schemes, Tax-Free Bonds, Best Monthly Income Schemes and other GoI Investment Options for Retired Senior Citizens.

Repo Rate and Investment Relationship

RBI has recently started to increase the repo rate which ultimately leads to higher interest rates. This is one good reason to select and invest in the Best Investment Options for Higher Returns, especially Senior Citizens.

So let us discuss the top three best investment options for senior citizens (60 years and above) where they can invest and what are the investment instruments they should avoid or keep a distance from.

Assumption is that by August 2022 we might see RBI increasing more and more interest rates so in this scenario one should not invest in instruments for the long term (10 year and above) where the interest rate is already set in the beginning itself for the entire policy term.

Although it is also being feared that in coming days, we are going to see a lot more increased interest rates by RBI, up to 0.4% in case of an emergency.

Therefore, let’s discuss the three best investment options for senior citizens to choose from and then the ones that can be avoided.

Top 3 Best Investment Options for Senior Citizens

Invest in the following Instruments:

1. RBI Floating Rate Bond

This GoI Bond is Issued by RBI so it is 100% secure. With a lock-in period of 7 years you get floating interest rates as and when the interest rate either increases or decreases during the policy term. Here, Interest payout would take place, half yearly (30th June and 31st Dec). As the interest rate changes after every 6 months, new rates get applicable to all old and new customers.

The minimum investment you can do is 1000 rupees with no maximum limit and the interest earned will be added to total income and taxed accordingly. Therefore, use Form 15 to save TDS and avail Tax Benefits.

Premature redemption is allowed for specified categories of senior citizens only.

• Senior citizens between the age group of 60 to 70 years are allowed to withdraw the amount after 6 years.
• For the age group of 70 to 80 years it is 5 years and for those who are 80 years and above, it’s 4 years.
• Premature redemption may attract up to 0.5% of penalty.

Here, you get a better return when compared to NSC (Post Office National Savings Certificate).

2. Government Bank FD (for 1-2 years)

It is always considered better option than post office FD. In case you want to earn more interest on your investment in FD then you can go for Fixed Deposit in a private bank where you can earn an interest of up to 7.55% and above. But remember that investment into private bank FDs could be risky when compared to Government Banks.

3. Government Company FD

For example, Tamil Nadu Power Finance FD, a little risky but since its government owned, it is a bit more secure than private bank FD or corporate FD. You can easily earn an interest between 7.0% to 8.5% quite easily when you stay invested for the term of 1-5 years.

Investment Options to be Avoided for Senior Citizens

• PMVVY (Pradhan Mantri Vaya Vandana Yojana)
• SCSS (Senior Citizen Saving Scheme)
• Long Term Fixed Deposit
• KVP (Kisan Vikas Patra)
• NSC (National Savings Certificate)
• Term Plan
• Plans like Assured Return or Guaranteed Return, with combinations of equity investment and insurance.

Age Wise Investment Portfolio

Age		Investment Portfolio
Above 60	:	» 40% in Stocks and Mutual Funds » 10% in Cash » 50% in Fixed Income
50 to 60	:	» 50% in Stocks and Mutual Funds » 10% in Cash » 40% in Fixed Income
40 to 50	:	» 60% in Stocks and Mutual Funds » 10% in Cash » 30% in Fixed Income
30 to 40	:	» 70% in Stocks and Mutual Funds » 10% in Cash » 20% in Fixed Income
Below 30	:	» 80% in Stocks and Mutual Funds » 10% in Cash » 10% in Fixed Income

Read:

• Portfolio Vs Age – Portfolio and Age Relationship
• How Much Money to Invest in Stocks and Mutual Fund
• What is Investment Club?
• Best Investment Options in India for Young Age Adults

Investment FAQs

Disclaimer & Conclusion

Information shared carries unknown risks and uncertainties linked to broad markets. Therefore, they should not be the sole basis of investment decisions. Advice received via this article should not be relied upon for personal and financial decisions. You should consult a professional for guidance based on your specific situation and risk level.

Mutual Funds and Equity Investment are subject to market risk. Please read the complete offer document, product brochure before making any investments. Please read the complete product details and take registered expert advice to understand the finer points and details of the product, before investing!

So, what are the Best Investment Options for Senior citizens?

Well, the answer is fairly simple. There are so many options to choose from but the one mentioned above are considered to be the safest and much more reliable when compared to the other instruments available in the market.

PS: Do not invest in any instrument for a long term where your interest gets fixed when you open your account.

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