The Fixed Deposit
If you are about to retire or have just retired, then you have reached the most peaceful stage of life. But, this also denotes the end of your regular income. So, you must think of a proper investment scheme that can substitute your income to help you financially after your retirement.
You will find several options, and many will suggest you different options, but the best will be investing in fixed deposit, as it offers high-interest rates and reliable returns. You can even interest payment cycle as per your need.
Higher interest rates- The rate of interest of senior citizen fixed deposits is higher than other normal FDs. In a bank, you will get a maximum interest rate of 7.25%, but in NBFCs you will get 8.75% interest rate to senior citizens.
Safe and secured- FD interest rates are not affected by market fluctuations, so the investment is safe and fixed. Even you can get the maturity amount of FD investment, by using the FD Calculator.
Tax Benefits – A person pays income tax for an entire working life, but he/she should not pay for post-retirement income. Senior citizens can invest in tax saver FD for 5 years, then claim deduction up to Rs. 150000 under 80C of Income Tax Act, 1961. A normal FD interest is liable for Tax Deduction at Source (TDS). Unlike normal FD, the senior citizen FD returns are not liable for TDS if the interest income is lesser than 50000 p.a. u/s 80TTB of Income Tax Act, 1961.
Company fixed deposit or ones offered by NBFCs and bank fixed deposit both have their own pros and cons. Let’s shed some light on them to help you make an informed choice.
Ease of Booking
Company fixed deposit of NBFC can be easily booked online from anywhere at anytime. The process requires minimum documentation. Using just your login credentials you can easily manage your deposit online without having to depend on lender’s representative. You may even renew it or opt for premature withdrawal via the quick and easy online portal.
As mentioned earlier company deposits can be withdrawn easily online before their maturity date. The flexible tenure chosen is between 12-60 months within which the withdrawal decisions can be made. NBFC like Bajaj Finance offers special rates on tenure of 15 months, on a minimum deposit of Rs. 1,00,000 starting from 7.85% onwards. Use online FD calculator for calculating the returns of your deposit money.
Ease of Diversification
Company deposits give the investor to choose between cumulative and non-cumulative deposits. Cumulative is one which provides interest at the end of the tenure while non-cumulative provides interest at monthly, quarterly, half-yearly and annual intervals to help you meet your financial needs.
You can make considerable returns on your fixed deposit in companies like NBFCs which offer higher interest rates on FD starting from 8.40%. Moreover, you may earn top-up interest of 0.25% on base rate upon renewal. Besides, schemes like senior citizen let you earn 0.35% higher interest on base rate too.
Investments are all about increasing your money within a certain stipulated period. Many of the investment options available in the market involve higher risks. Therefore, it is necessary that you invest smartly and plan your investments to get the most out of them.
In today’s volatile market conditions, it is essential to invest in schemes that provide you high returns with minimal market risks. You can also evaluate the time it takes to generate high returns.
Best Low-Risk Investment Options
If you are looking for best investment options that can generate decent returns at lower risks, here are a few options for you:
Fixed deposits are the safest investment schemes offering guaranteed returns. Furthermore, if you choose company fixed deposits, you get the benefit of higher returns than banks. For example, when you invest in Bajaj Finance Fixed Deposits, you get stable returns with flexible tenor, and online account management.
Mutual Funds also help you earn higher returns. You can divide your investments into different funds across multiple companies, to benefit from portfolio diversification. Grow your mutual fund portfolio, slowly and steadily, by starting a monthly Systematic Investment Plan (SIP) starting with lower amounts.
Public Provident Fund
Public Provident Fund (PPF) is a tax-free government investment scheme in India. The PPF scheme was launched by the government to encourage the spirit of savings among Indian citizens. Launched in 1968, PPF is a smart investment that can save taxes. Along with saving taxes, you can also get a return of 7% per annum.
Investment Options for Senior Citizens
Senior citizens get the additional advantage of periodic returns that substitute their monthly income. There are a number of smart investment schemes for senior citizens that provide better returns at minimal risks.
Retirement doesn’t mean that your money needs to stop growing. To prevent any high-order changes to your investment strategy, you must choose some of the best investment options to keep your money safe, and ensure stable returns. Here are a few investment options to ensure a safe retirement:
Post Office Monthly Income Scheme
Post Office Monthly Income Scheme (MIS) offers assured returns every month on your deposit. The period of maturity for this scheme is 5 years. The most important benefit of the Post Office MIS scheme is that it is not affected by inflation and continues to give you fixed returns.
Pradhanmantri Vaya Vandana Yojana
Pradhanmantri Vaya Vandana Yojana (PMVVY) for senior citizens offers guaranteed returns at 8% interest rate. Operated by Life Insurance Corporation (LIC), PMVVY is one of the most trusted smart investment schemes for senior citizens in India as it yields fixed returns along with tax benefits.
Financiers like Bajaj Finance also offer higher interest rate of up to 8.75% on Fixed Deposits, for senior citizens. This makes Fixed Deposits a must-have in your investment portfolio, because of the safety, flexibility and stable returns.
The returns that you can get from the individual schemes mentioned above will depend on when you start investing. If you are in your early phase, you can afford to invest in long-term investment plan according to your financial condition and how soon you want the returns.
You can also consider opting for pre-approved offers by Bajaj Finserv, where all you have to do is share some basic details and your money is ready for you. Get some of the best offers on loans, cards, EMI Network and more. Check your pre-approved offer here.
Fixed deposit is one of the safest investment avenues for all kinds of investors, especially if you have a low-risk appetite. Investing in fixed deposit gives you a greater control over your investment along with greater flexibility, and assured returns at maturity. However, in order to leverage from the aforementioned benefits, the first and foremost prerequisite is to choose the right FD scheme in the first place.
Fixed deposit schemes offered by Bajaj Finance gives you the highest assured returns along with the highest degree of flexibility. However, you need not invest in it before knowing all the benefits associated with investing in the mentioned FD schemes.
Highest returns on investment: Fixed deposit schemes offered by Bajaj Finance comes with the highest return on investment which can range from 8.40% per annum to 8.75% per annum depending on your age, and the frequency of investment. Also, the ROI in case of a senior citizen is equally high and the same can be up to 8.75% per annum.
Flexible tenors to suit your needs: The scheme comes with tenor flexibility allowing you to choose the maturity period in accordance with your needs.
Fixed deposit calculator to help you plan well: The fixed deposit calculator available on the website helps you calculate the returns in advance, and plan your investment concisely and consciously.
Online account management: Lastly, the online application and account management facility give you a greater and hassle-free control of your investment. You can manage your FD account using your laptop from the comfort of your home or office.
No matter what your age group is planning for your financial security will help you to be better equipped in handling your family life. As a couple in late 20s here are a few interesting schemes you can invest in.
This is a good time to purchase an insurance policy for you and your family. There are several plans you can opt from based on your immediate and future requirement such as health insurance, life insurance, child plan, car insurance, home insurance, motor insurance, protection plans, investment plan, retirement plan, savings plan, to name a few.
This is a low-risk, high return investment. Simply park a lump sum amount in your FD account and earn interest starting from 8.40% on it. Interest income up to Rs. 10,000 is tax-free. While, you can submit Form 15G and Form 15H to save tax on interest income of Rs. 10,000 or more.
Public Provident Fund (PPF)
It has a longer tenor of up to 15 years so the impact of compounding of tax-free interest becomes huge especially in later years. This is a safe investment as interest earned and principal invested is backed by sovereign guarantee.
Other investments such as real estate and gold are other lucrative options you can consider. However, the kind of savings you choose depends on your financial goals both immediate and of the future. Talk to financial planners, your family and check out aggregator sites to learn more and invest wisely.
Before you pick an investment option from mutual fund and fixed deposit it is better to have a financial roadmap. This will help you better divide your funds based on immediate needs or for future. You can check aggregator sites to learn more.
Let’s look at crucial differences between mutual fund and fixed deposit to help you take an informed decision.
Fixed deposit is a zero-risk investment as it is free from market fluctuations. It lets you earn interest on a fixed amount which you can withdraw before maturity or at maturity of the deposit.
Mutual fund is subject to market fluctuations even though the investment covers a range of stocks within a fund. So, eventual gains depend on existing market conditions and hence can be fluctuating.
#2 Return on Investment
Fixed deposit offers an appreciable fixed interest income on the deposited amount over the specified tenure.
Mutual fund income could be potentially higher or lower based on your judgement and investment in the market. Rising market results in good earnings while falling market
Fixed deposits will let the depositor make a premature withdrawal though there will be small charges. On withdrawal at maturity of the deposit the depositor can save tax by filling up Form 15G and Form 15H.
Mutual funds will let the investor make a premature withdrawal if the minimum holding period is complete. But, there will be an exit load charge (around 1%) in this case.
For so many years, you were only aware of those two to three investment options. Most of these neither give a higher return on investment nor they show you how much you are going to get in the end. Here is a list of some new investment avenues in 2018:
Cryptocurrency- Recently, this market is growing at an exponential rate, and more and more people are getting interested in investing in cryptocurrencies like Bitcoin and Ethereum. Cryptocurrency works on blockchain technology, so it secured, and it gives you the opportunity to become rich on daily basis.
Fixed Deposit- FD is the safest mode of investment, where you are assured to get a higher return on investment as the rate of interest is very high as compared to interest earned from any savings account. You can easily check and calculate the exact maturity amount of the FD by using Fixed Deposit interest calculator and remain assured that you are definitely going to get this amount after maturity.
Gold- It is considered to be the most robust form of investment. In 2018, many new forms of investments have evolved like Gold ETFs and Gold mutual funds within the category of gold investments.
Mutual Funds- The best way to start investing in mutual funds is through Systematic Investment Plans or SIP. Here you can invest a fixed sum either monthly or quarterly for a specific duration and later you may get the money along with the interest.
To know about the other options, read: http://whazzup-u.com/profiles/blogs/plan-to-save-in-2018-refer-to-these-new-age-investment-options
At the beginning of every financial year, almost all corporate employee has to fill an investment declaration form, declaring his investment plan for the year. Though it becomes annoying sometimes, if you take my words - it is no less than being gifted by your loved ones on valentines.
When your employer asks you to declare your investment plan, he/she never intends to discomfort you with the burden. They do so to help you save your hard earned money from being consumed by the Income-tax department. The same help them accurately file your income tax and to ensure you end up with a higher in-hand salary.
Therefore, rather than avoiding the declaration, proactively shoulder on the responsibility. But before you declare your investment plan for FY 2018-19, keep these things in mind.
Lastly, while filling the declaration form, ensure minimum chances of errors. Fill the form properly and manage an efficient investment plan declaration.
A well planned, stress free and well provided for retirement is something we all aspire to achieve. Until the appropriate age is reached, we work hard to save enough and invest in the right instruments that provide good returns with nominal to zero financial risk. To build the required corpus, the longest tenure is opted for. As the saved or invested sum earns interest at the rate specified and/or applicable based on market and economic conditions, the same is liable for taxation. These deductions can take a toll on the earnings and eventually affect the retirement corpus.
To avoid the harmful effects of taxation, there are several ways how these taxes can be avoided. Listed below are a few of such ways:
The maximum interest income can be earned by investing in a fixed deposit for senior citizens of NBFCs as they provide returns of the range of 8.10%.
So, by making the right investment choices, finances for retirement will take good shape until the time they will be required for use.
Learn more on this subject by following the resource given below: How Senior Citizens Can Make the Most of Tax Breaks on Offer
Retirement planning is mostly about saving and investing in the right financial instruments so that the lack of a regular source of income will not affect the lifestyle of the individual under question and those dependent on him/her. By making the right investment choices, an individual can make sure that after retirement, he/she is financially stable, independent and trouble-free.
Given below are a few important things that need to be taken care of when planning for retirement:
Reviewing Expenses and Calculating the Amount Needed
Budgeting is the starting point for any type of financial planning and retirement is no exception here. Individuals should make a budget, clearly listing the projected expenses of the future- here, both major and minor expenses should be listed. This will give an idea of the tentative amount to be saved until retirement in order to lead a convenient life.
Factoring in Risk
Whenever there is money, there is usually some amount of risk associated with it. This is why one should take utmost care to minimize the risk and work on ways to keep the funds safe and secure until retirement. Individuals should invest more in options like fixed deposits for senior citizens which are much safer as compared to market related investments.
Building an Emergency Corpus
Apart from the regular expenses, retirement could also bring unforeseen expenses. For these, an emergency corpus should be built so that the funds saved for regular expenses need not be used up. An emergency fund will help in avoiding situations that could make an individual financially vulnerable.
Also Read :- Protect your Retirement Funds from Tax
Availing Professional Advice Whenever Necessary
Tax savings, investment options, expenses- professional advice in these aspects will help in making financial planning for retirement more managed and effective.
By implementing these simple steps, an individual can work towards a comfortable retirement without having to worry about lack of funds and emergency situations.
The resource given below lists the additional ways how retirement planning can be made even better: Smart Financial Moves to Make if you Going to Retire
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.