Senior Citizens Savings Scheme | Senior citizens can increase their income sitting at home? Consider these 5 investment options, senior citizens can increase income sitting at home, consider these 5 investment options

Investors looking for a fixed regular income on their capital have been hit the hardest by the fall in interest rates. Whereas major banks are offering senior citizens a maximum interest rate of 6% on fixed deposit deposits for tenures between 5-10 years. However, post office small savings schemes offer relatively higher interest rates. However, investment experts are of the view that the current rates on small savings schemes may not survive and it is only a matter of time before the government cuts interest rates on these schemes, however, for the current April-June quarter. was reversed. In this situation there are five investment options where senior citizens can invest their hard earned money to get regular income.

Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme is a 5-year scheme and one can open more than one account but the total amount that can be invested in all the accounts cannot exceed Rs.15 lakhs. The interest rate on this scheme is fixed by the government every quarter. For the current April-June quarter, interest on investment in SCSS will be 7.4% per annum. Once you invest in this scheme, you will get the interest rate for the entire tenure of 5 years. However, the interest earned in the Senior Citizen Savings Scheme is fully taxable; It is taxed as income from other sources. Given the high interest rates and sovereign guarantee of the principal amount, SCSS is suitable for senior citizens who are looking for high fixed return rate and regular income on quarterly basis.

Post Office Monthly Income Scheme (POMIS)

Post Office Monthly Income Scheme is also a 5 year scheme and once invested the interest rate remains the same till maturity. For the current April-June quarter, the interest rate on this scheme has been fixed at 6.6 percent per annum. An individual can invest a maximum of Rs 4.5 lakh in his own name, while a maximum deposit of Rs 9 lakh can be made for opening an account in joint names. As the name suggests, interest is paid on a monthly basis in this scheme.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

Pradhan Mantri Vaya Vandana Scheme has been extended till 31st March, 2023. Presently, the scheme is providing guaranteed pension at the rate of 7.40% p.a. payable monthly. However, the interest rate on this scheme is reset on 1st April every year and then the pension amount changes based on the new rate. Annual reset of the assured rate of interest will be as per the revised rate of return of SCSS but up to a maximum limit of 7.75%. Once this limit is reached, a new rate of interest will be assessed. The maximum investment allowed in this 10-year investment scheme is Rs 15 lakh. On completion of the tenure of 10 years, the principal amount along with the last installment of pension will be returned to the investor.

Bank Fixed Deposit (FD)

Bank fixed deposits have always been the most popular investment scheme for senior citizens. But these schemes have lost their attractiveness due to the recent fall in interest rates. Bank FDs offer you the flexibility to choose the payment option as per your choice-monthly, quarterly, half-yearly or yearly. Currently most of the big banks are offering up to 6% interest on FDs to senior citizens for tenures between 5-10 years. However, some small finance banks and co-operative banks are offering more than 7% interest rate on senior citizen FDs.

floating rate savings bonds

The tenure of Floating Rate Saving Bonds 2020 is 7 years and the interest rate on this scheme changes every six months and is linked to the interest rate paid on National Savings Certificate (NSC) plus 35 basis point spread. Interest on this scheme is paid twice in a year. on 1 January and 1 July. At present, the scheme offers 7.15% interest, which is fully taxable in the hands of the recipient. There is no upper limit for investment in this scheme.

(Disclaimer: This article is written for informational purposes only. It should not be construed as investment, financial or other advice)