Once you retire, you have big the challenge of man aging your finances in a smart and secure way; Please look at five such post retirement investments options in India which strike that perfect balance between risk and returns.
Fixed Deposits with banks and Post Offices
Fixed Deposits (FD) or term deposits can be started in any bank or post office. They are safe, secure and the returns are guaranteed. One can complain that the returns are low and they have been falling sharply in the last few years. But that is the trade off for getting something that is absolutely secure. If you are senior citizen (above the age of 60), you are entitled to get a higher rate of up to 50 basis points in many cases. You have two options in FDs; you can either choose to have the interest accrued or get paid the interest regularly. You can open FDs with a bank or a post office and both are guaranteed and equally safe. However, there is something you need to know about the tax treatment. Senior Citizens have exemption on FD interest up to Rs.50,000 per annum and also there will be no TDS. So the typical hassles are overcome and your post tax returns go up sharply.
Senior Citizens Savings Scheme (SCSS)
This was a special scheme that was launched specifically for the benefit of retirees and senior citizens and is not open to the general investing public. This SCSS scheme is customized and tailored to the needs of senior citizens and can be purchased from banks and post offices. The maximum amount you can deposit in a SCSS is restricted to Rs.15 lakh and the tenure is 5 years, with an option to extend it by an additional 3 years. Interest rates on SCSS (@ 8.5% to 9.5%) are higher than other investment options. But there is a trade-off here. This makes a lot more sense if you tax assessee because the investment made in Senior Citizens Savings Scheme is tax-deductible under Section 80C. However, the interest earned on it is taxable at your peak applicable rate of tax with no exemptions.
National Savings Certificate (NSC)
NSC is another Post Office-based savings scheme that offer good returns and are a safe form of investment because it is guaranteed by the government. NSC certificates can be bought at any post office in multiples of Rs. 100 every month for 5 years, with the minimum contribution being Rs. 100. There is no ceiling and NSC gives an interest of 8.1%, which is subject to change from time to time. While interest on NSC is taxable, the invested amount qualifies for tax exemption under Section 80C within the overall limit of Rs.1.50 lakhs per annum. Premature withdrawal is not permitted but you can easily get a loan against NSC.
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