Senior residents above 60 years of age and in search of locations to maintain their financial savings protected post-retirement whereas incomes a reasonable rate of return on them, normally wind up with funding choices reminiscent of financial institution FDs and RDs, National Pension System (NPS), put up workplace FDs, and RDs, Pradhan Mantri Vaya Vandana Yojana (PMVVY), and Senior Citizens’ Savings Scheme (SCSS).
Even although these are among the finest choices for senior residents, together with mutual funds, there are some investments that supply personalised companies for senior residents together with larger rates of interest.
For occasion, the Senior Citizens Savings Scheme provides an everyday stream of earnings for senior residents and tax-saving advantages. Though choices like mutual funds supply high-return they’re additionally comparatively high-risk, therefore, specialists say low-risk fastened return funding choices like financial institution Fixed Deposits, put up workplace FDs, PMVVY and SCSS are additionally wanted within the portfolio of a senior citizen investor. According to specialists, a perfect portfolio relies on the wants of senior residents. For occasion, to get one of the best return together with wealth creation, one ought to have the mixture of each high-risk high-return funds together with low-risk fastened return funding choices.
Additionally, the government-backed SCSS scheme is understood to be safer, in contrast to financial institution FDs, because the investments are held with the federal government. This saving scheme comes with a tenure of 5 years which may also be prolonged by 3 years by the investor.
Note that SCSS is a long-term saving possibility. Investors can make investments up to Rs 15 lakh, each individually and collectively within the saving scheme. Having stated that, an investor can make investments the retirement profit that they’ve acquired, or Rs 15 lakh, whichever is decrease. The invested quantity can not exceed the retirement profit that the investor has acquired.
The curiosity earned from the SCSS account is credited to the investor’s linked financial savings account on the identical put up workplace, therefore, traders need to open an SCSS account at all India Post Offices. The present curiosity rate provided on SCSS is 7.4 per cent, which is taxable, and funding underneath this scheme qualifies for the advantage of Section 80C of the Income Tax Act, 1961.
Keep in thoughts, that within the case of untimely withdrawal, penalties will probably be charged at 1.5 per cent of the deposit quantity if the investor exits from the scheme earlier than completion of two years from the date of account opening. If the investor exits from the scheme inside 2 years and fewer than 5 years from the date of account opening, 1 per cent of the deposit quantity as a penalty is charged.