After retirement, it is the starting of a new life. Senior citizens have a sizable amount of money in hand to invest. However, one should be very careful to choose investment options to ensure smooth navigation of life expenses in golden years. Regular income is the key to provide a comfortable retirement life.
How To Choose Investment Options For Regular Income
To ensure regular and fixed income, it is necessary that your capital is in safe hand. At the same time, you must ensure that you are not paying the too high price for safety. Some investment options like Annuity are considered safe, but the return is as low as savings bank account! Hence, one should choose two-three good choices, including Government Schemes and good quality Fixed deposits.
In retirement age, one should also make provision to access emergency fund. Some most popular investment options are Pradhan Mantri Vay Vandna Youjna (PMVVY), Senior Citizen Saving Scheme, Post Office Monthly Income Scheme and Fixed Deposit.
Pradhan Mantri Vay Vandna Yojna(PMVVY)
This scheme was launched in 2017 by the Central Government through Life Insurance Corporation (LIC) of India. Every senior citizen of age 60 and above is eligible to invest the amount up to Rs. 15 lacs for ten years under this scheme. The yearly ROI under this scheme is 8.3%.
For regular income as per one’s need, it is possible to get income at monthly, quarterly, half yearly or yearly interval. The scheme gives protection against any fluctuation of interest rates for a comfortable period of ten years. You can open this account in any branches of LIC. You can also take help of LIC agents to complete formalities.
Senior Citizen Savings Scheme(SCSS)
This scheme is also launched by the central government, to ensure higher interest income to senior citizens after retirement. In this scheme too, like PMVVY, the limit is Rs. 15 Lacs. If your spouse has also reached 60 years of age, senior citizen couple can invest up to Rs. 30 lacs in this scheme. The investment tenure is five years and can be extended for further three years. The interest is paid at the end of every quarter into the savings account of the senior citizen. You can open this account in the post office or nationalized bank's branches.
Post Office Monthly Income Scheme (POMIS)
The senior citizens who exhaust limit of Rs. 15 lacs in PMVVY and SCSS have an option to invest an amount up to Rs. 4.5 lacs under this scheme. The interest rate is lower than these schemes, hence it is advisable to invest in POMIS only if you have excess fund after investing in the above two schemes. You can open the account with any post offices in the country. The interest is paid monthly in the bank account of the depositors. This scheme is open to all citizens, not limited to only senior citizens.
Fixed Deposit
While we all want a regular income, life doesn't offer regular moments all the time. In some emergency time, we may need a lump sum amount to overcome emergency. If you use the funds under PMVVY or SCSS, you will stop receiving regular income afterward. Hence, it is essential to open Fixed Deposit to protect your regular income from the emergency. While opening Fixed Deposit, you can consider good NBFC like Bajaj Finance, who have received AAA credit rating, which ensures the highest safety to the investment. Bajaj Finance offers a variety of FDs, including tenure and interest interval, to suit your needs. The FD rate is also higher than bank deposits.
Aman is working in the domain of Investment management in one of the top universities. He has published research papers and case studies in Investment and Fixed Deposit marketplace. He is an avid blogger in the domain of Investment management. you can also find him on social networking platforms.