It is the responsibility of every parent to offer a safe childhood and gift an even more secure future to their children. Speaking in terms of finances, there are various investment schemes where you can put in your money towards your child’s future. However, you must choose the one which offers assured returns and which aptly matches your financial requirements. Let’s know more about them here - Provident Fund During your professional work you may set aside a fixed amount every month towards your child's future in provident fund account. This can be withdrawn at the time of maturity to cater to various financial needs. Mutual Fund If you are are a risk-taker then then you can deposit in equity mutual funds. Though, they depend on market fluctuations they will still help you earn appreciable interest income by diversifying your investment in various funds. Fixed Deposit This is a low-risk, low-maintenance savings option offered by leading institutions such as NBFCs. They provide higher rate of interest on FD starting from 8.75% onward which helps to accumulate wealth and secure it for your child’s future needs. Besides, interest up to Rs. 10,000 is tax free. To save tax on income of more than this amount you can submit Form 15G and Form 15H to the lender. Moreover, there are two types of withdrawals available - cumulative (where amount is collected at maturity) and non-cumulative (where amount is collected at monthly, quarterly, half yearly and annual basis). Real estate
Buying a property is another lucrative investment option. As this is a long-term investment you can choose to gift them as a heritage thus, securing their future.
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Saving schemes today let you prepare well in advance for the future. They let you divert finances to where they will be required the most. But before you put your money into them you must know about them completely to make proper investment decision.
Fixed deposit is one such scheme which offers you low-risk, low-maintenance finance option to fix a lump sum and earn appreciable income on it. Let’s know more about it here -
Major NBFCs offer fixed deposit scheme with higher interest rate starting from 8.50% onward. It is a lucrative option as you can fix the amount and earn appreciable income. This income is tax free too up to an amount of Rs. 10,000. To save tax on income of more than Rs. 10,000 you can submit Form 15G and Form 15H to your lender.
Moreover, senior citizens receive 0.35% higher interest on the base rate. They can book the deposit online with minimum paperwork in their name or for their family. Upon renewal, depositors receive 0.25% higher rate on the base rate and thus can earn more on their fixed amount. Besides, you receive flexible tenure of 12 to 60 months to fix the amount and earn income.
Also Read: Best Investment for Senior Citizens
There are two types of withdrawals available - cumulative (to withdraw amount at the end of the maturity period) and non-cumulative (to withdraw at quarterly, monthly, half yearly and annual basis).
Rated high on safety and stability with ICRA’s MAAA (stable) rating and CRISIL’s FAAA/ stable rating so the deposit is never at risk. It helps to accumulate wealth and gradually grow your corpus with time.
You may also Read about: What is the Minimum Credit Score you Need to Avail a Loan
Watch the video below to know what are the Benefits of Fixed Deposits for Senior Citizen:
Retirement is a stage where you will no longer get your regular income. So, you must start organizing your finances early in life. You must choose the proper way to target a large retirement corpus as well as have options through which you can generate income even during retirement. By the time you retire, you must have enough money as savings. For which you can use different investment options such as Senior Citizen FDs, Senior Citizen Saving Scheme (SCSS), and Provident Fund (PF). But, investing in any mode will not help until and unless you strategize the sources of steady income while planning your finances. Here are a few useful strategies that will help you to gain a lot. Consider the External Factors You must consider the external factors, while investing in schemes where you will get the returns in the long-term. Your retirement plan may facilitate regular and guaranteed income during your retirement. So, it is essential to check the external factors such as market volatility, inflation, as well as unforeseeable emergencies, that would affect the investment returns and interest rates. This strategy will be future-proof. Include Guaranteed Income Options You should also ensure guaranteed income within fixed intervals. Fixed Deposits could be an excellent investment option for retirees so that they can earn higher and regular returns without facing any risk. You can even use the FD calculator before you decide on the type of FD you want to choose, to make the most of your fixed deposits. Know investment option in delhi Retirement is a time to sit back, relax or do something for which you never had the time before. A lot of this depends on your financial independence. To help you plan for your retirement there are several investment options for senior citizens that you may invest in today. Which one you opt for will depend on your personal preference. However, to help you make an informed decision here are some reliable saving schemes for you to consider - Fixed Deposit This is a low-risk, low maintenance saving option which helps you save for immediate and future financial needs. Major NBFCs offer lucrative high interest rates on the deposit to help you accumulate wealth and grow corpus overtime. Interest rates start from 8.50% onward with flexible repayment tenure of 12 to 60 months. Senior citizens get additional interest rate of 0.35% on the base rate and they can easily book the deposit online with minimum paperwork. Interestingly, the deposit offers two types of withdrawals - cumulative and non cumulative. In the former you can withdraw amount from the deposit upon maturity while in the latter you can withdraw at quarterly, monthly, half yearly and annual basis. Post Office Monthly Income Scheme Senior citizens can book a post office saving account with cash only. The depositor can choose a nominee for the account. The account can be transferred from one post office to another. Account can be booked for a minor too and it can be converted to their name once they attain majority. The depositor has to put in the money for a minimum period of 5 years during which they cannot withdraw this amount. While, they can partially withdraw after a period of 7 years and fully withdraw it after 15 years. Additional Read: Post Office Monthly Income Scheme Vs Fixed Deposit: Which Is Better for Senior Citizen? Fixed deposit has been the most preferred investment avenues of Indians. Studies have shown that 95% of Indians preferring to park their money in fixed deposits. However, in mutual funds you can gain more interest. So, before deciding the best saving plan India, you need to study the benefits of both the investment plans. Benefits of Mutual Fund:
1. Small Amount Investment If you do not have a large sum of money or you do not want to take the risk, you can start investing in mutual funds with a small amount. You can set up a systematic investment plan (SIP) with a small amount of Rs.500 per month only. When your salary or cash inflows will increase, you can increase this amount. 2. Potential Inflation-adjusted Returns Mutual fund is one of the best long term investment plans, that generate inflation-adjusted returns. Generally, with inflation the value of wealth gets eroded with time. Mutual funds mainly equity-oriented funds, are better than the other asset classes as they have the best potential to generate inflation-adjusted returns in the long run. 3. Flexibility to Use You can use the mutual fund amount anytime you want to. In case of emergency, ultra-short duration funds are ideal for meeting short-term goals such as a vacation, home renovation, etc., or long term goals such as higher education, etc. you can use mutual fund. To know the benefits of a fixed deposit, read: http://onlinedrifts.com/fixed-deposit-vs-mutual-fund-which-saving-scheme-is-best-in-2018/
Before you proceed with your investment plans, you must be aware of a few facts about the applicable deductions on the income generated from the investment and how to avoid them.
Having said that, if your gross annual income (which includes the income from the primary source: work, business + income from secondary sources such as interest income generated from investment) doesn’t exceed the taxable limit; you can claim the TDS amount deducted. How can you do that? You can use the form 15G or 15G for the purpose. You can fill the form 15G and 15H, whichever is applicable in your case and submit it to the bank asking them not to deduct any TDS because your income is below taxable limit. What conditions to fulfill while submitting the Form 15G and 15H?
Last but not the least, some people find it difficult to decide the right form to use. Hence, take help from the expert and choose the right form to use. Read more at: Save TDS on Interest Income with Forms 15G and 15H
Also Read about What Are the Best Short-term Investment Options:
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About Author: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. Archives
August 2022
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