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What are the investment options for senior citizens

What are the investment options for senior citizens
When you retire,your life changes in many ways and so do your finances.One of the biggest changes is that instead of contributing to tax exempt retirement savings plans that reduce your taxes and you'll start tapping those savings for income and paying taxes at your regular rate.

Main investment considerations for senior citizens are

  • Regular cash flows 
  • Capital protection 
  • Liquidity investments 
  • Reducing tax 
  • Keep Up with inflation 
we will discuss investment options for senior citizens keeping in these key investment considerations.

Fixed deposits:

FD are safety and reliable investments.Interest rate can vary from one year to other and interest is fully taxable. 

  • Maximum investment-no upper limit 
  • Time period-7 days to 10 years 
  • Lock in period- same as tenure 
  • Rate of interest-6-9%9 revised every year0 
  • Premature withdrawal penalty-interest rate applicable will be 1% less than original rate 
  • Tax status-exempt from tax

Senior Citizen Saving Scheme:

  • Minimum investment- Rs 1,000 
  • Maximum investment-Rs 15 lakhs 
  • Time period-up to 8 years 
  • lock in period- 5 years 
  • Rate of interest-9.3% 
  • Premature withdrawal penalty- 1% 
  • Tax status-exempt from tax

Post Office Term Deposit:

  • Minimum investment- Rs 200 
  • Maximum investment-No upper limit 
  • Time period-1-5 years 
  • Lock in period- no lock in 
  • Rate of interest-8.2% 
  • Premature withdrawal penalty- 1% 
  • Tax status-exempt from tax

NSC-National Savings Certificate:

  • Minimum investment- Rs 100 
  • Maximum investment-No upper limit 
  • Time period-5-10 years 
  • Lock in period- same as tenure 
  • Rate of interest-8.6% 
  • Premature withdrawal penalty-No premature withdrawal allowed 
  • Tax status-exempt from tax

ELSS-Equity-linked Savings Scheme:

  • Equity-linked Savings Scheme (ELSS) offers a flexible amount and tenure of investment. 
  • Minimum investment- Rs 500 
  • Maximum investment-No upper limit 
  • Time period-both short and long term 
  • Lock in period- 3 years 
  • Rate of interest-market linked 
  • Premature withdrawal penalty- No premature withdrawal allowed 
  • Tax status-exempt from tax

Pension plans:

An individual should essentially have one pension plan in addition the other investment options to have a regular source of income after retirement.
  • Pension plans are available for people up to the age of 80 years 
  • Minimum investment- Rs 200 
  • Maximum investment-No upper limit 
  • Time period-can be short and long term 
  • Lock in period- 3 years 
  • Rate of interest-4% 
  • Premature withdrawal penalty- No premature withdrawal allowed 
  • Tax status-exempt from tax 

Conclusion:
It is advised to have a diversified investment portfolio for safe and better returns instead of putting all your money in savings account of single investment tool and suffer a loss. For retirement planning, be sure of investing in schemes offering long-term stability and aggressive products that offer high returns on investment.

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