One of the best ways to utilize surplus income (like business profits, salary appreciation or pension) is investing on a FD. Saving is also a safe and viable option but you cannot expect higher returns here.
An FD gives higher returns at minimal risk and the earnings can either be reinvested or used. This makes fixed deposits the ideal investment option over saving for senior citizens.
Mutual funds, shares and gold also provide high returns but they are dependent on the market conditions and hence involve a greater risk for pensioners. Fixed deposits are safer as they are not dependent on the market conditions.
Benefits of Fixed Deposits for a Retired Individual
Higher Interest Rates
Senior Citizen FD offer higher interest rates than any savings account. The interest rate is dependent on the amount and tenure of the investment. Lump sums can be split up and invested in separate FDs to earn extra benefits. Senior citizens are entitled to a higher rate of interest for FDs.
FDs are taxable when the interest earned is higher than Rs 10,000. For senior citizens without taxable income, TDS can be avoided by filing the 15G declaration form.
The above mentioned all things indicate that the Senior Citizen Fixed Deposit a Profitable Investment when you get a closer your retirement.
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.