The investment market is inundated with lucrative programs, but finding the right one for your needs is no easy task. You are often torn between a low risk, low return option and a high return but high risk plan. However, in the midst of this confusion, there are also plans that offer good returns with little or no risk. Some of these plans also have tax advantages that make them a solid investment option for someone looking to generate maximum return without any risk. So, if you are a senior and are looking to invest your hard earned savings in stable investment options, these programs might just be a good option for you.
Tax-saving fixed deposits
Fixed deposit is one of the preferred investment options for risk-free investors. While the usual FDs come with a flexible tenure period, those offering tax benefits have a minimum lock-in period of five years. Seniors can enjoy tax benefits of up to Rs 1.5 lakhunder these tax-free FD options. In addition, the options for earning a return are flexible and you can choose to receive the interest annually, quarterly or monthly. India’s largest public sector lender, State Bank of India, offers 6.2% interest rate on tax-saving program for seniors
Seniors Savings Plan (SCSS)
Another popular tax savings scheme for seniors is the Senior Citizen Savings Scheme (SCSS). You can open a SCSS account at your nearest bank or post office with precise proof of age. The rate of return under this scheme remains the same whether you open the account at a bank or a post office. Deposits in SCSS must be multiples of Rs 1000 and the current rate of return is 7.4 percent.
Bonds issued by public sector companies such as HUDCO, NTPC, NHPC, NHAI, IRFC and others are also a preferred investment option for seniors in the highest tax brackets. These bonds are issued by the government for a term of 10, 15 and 20 years. However, investors also have the option of selling these bonds in the secondary market prior to the maturity period. These bonds are government notified and you can purchase them through your Demat account. Alternatively, there is also the option of buying bonds in the secondary market as they are listed on NSE and BSE. The rate of return received on these bonds is risk free.
Public provident fund (PPF)
Public provident funds are another popular investment program that offers good guaranteed returns with tax benefits. You can open your PPF account with your nearest post office or a bank with annual deposits as low as Rs 500. The maximum annual deposit allowed under this program is Rs 1.5 lakh. PPFs have a 15-year maturity and their current rate of return is 7.1% (compounded annually). Investments in FPPs are also eligible for tax benefits under section 80C of the Income Tax Act.
The National Pension Scheme (NPS) offered by the Pension Regulatory and Development Authority (PFRDA) is open to all employees. While the previous age limit for joining the NPS was 65, it has now been extended to 70. You can sign up for NPS with a minimum annual deposit of Rs 6,000 which can be made as a lump sum or as a monthly payment of Rs 500. The program is linked to the equity market and offers more returns than some of the other programs. savings from the market. . The yield of NPS varies between 9 and 12 percent.
While these options look good on paper, it is still advisable to do a good market research and explore the options before putting your money into a project.
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