Most of us try to save our earnings and accumulate it over time to build a good retirement corpus. One of the most stressful things about retirement for many is the lack of monthly income and having to depend on a fixed amount for all expenses. At such a time, a good investment scheme offering monthly payouts can be a great way to maintain liquidity without having to disrupt the rest of your savings.
Post Office Monthly Income Scheme or Post Office MIS
This scheme comes under the schemes offered by the government of India under Posts Department. The Monthly Income Scheme (MIS) offers an interest rate of 7.3% payable monthly. The interest is received on a monthly basis as it starts from the time of the deposit. The highest that the limit goes for investing in this scheme is 4.5 lakhs in a single account and it goes up to 9 lakhs in a joint account. The time period of the maturity of the account in this scheme is five years.
Fixed Deposit (FD) Â Â
Fixed Deposits are one of the more preferred and safer investment schemes in India. The Fixed Deposit rates are 4% to 7.5% which is higher than the rates offered in any other scheme. This tenure can be chosen from 15 days to 10 years. The choosing between monthly and quarterly is the cumulative time period and the non-cumulative is the final time period during maturation of account. Therefore this scheme is safe for senior citizens monthly income. The market rates do not affect the interest rates, thus even if withdrawn during the market rates fluctuation, the amount and the interest will remain the same. The smart investment plan for monthly income for senior citizens is FD’s where they get good returns and flexible premature withdrawal options. One such Non-Banking Financial Corporation is Bajaj Finance which operates with similar benefits offering interest rates of 8.95% for senior citizens. The tenure offered is between 12 months to 60 days.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
The scheme is a government scheme that is turning out to be one of the best for senior citizen monthly investment scheme. It offers an interest rate of 8%. The scheme is operated by Life Insurance Corporation (LIC). In the recent budget announcements in 2019, the limit of investment was increased to 15 lakhs from 7.5 lakhs for this scheme. The scheme is also exempted from the tax payments making it easier for senior citizens to avail the benefits of the scheme. The time period to invest in the scheme has been extended till 31st March 2020 from 4th March 2018. Thus, the senior citizen husband and wife can invest 15 lakhs each and avail the monthly income.
Senior Citizen Savings Scheme (SCSS)
The Senior Citizen Savings Scheme (SCSS) started in 2014 is for senior citizens of age 60 and above, although the new rule was passed including the voluntary retirees from the age 55 and above. Â The investment can start by investing cash below 1 lakh and by cheque if above 1 lakh. The interest rate of the scheme is 8.5% and will increase quarterly. The time period of the scheme is 5 years and further can be extended if matured till three years. Premature withdrawal will not provide the benefit for the extension of the three months in the account. Under Section 80C the tax benefits are applied to this scheme as well. Â The amount withdrawn before the premature account will not be included under Section 80C for saving tax.
Mutual Funds
The systematic withdrawal plans in mutual funds provide a monthly income to the investors from their investments. A specific amount is to be decided and given for the monthly income in the systematic withdrawal plan. On a given date the amount decided will be given to the account holder. A number of mutual funds offer an option of regular payment of money but they all are not guaranteed. It is attached to the market and the profit is distributed from those gains. The market function and profit or loss decide the amount that can be paid to them on a monthly basis.
Usually, as a senior citizen, you would want your hard-earned money to be invested in a safe investment scheme that would give you definite returns. In that regard, for maintaining a regular inflow of income and security of your funds, Fixed Deposits by Bajaj Finance can be a great option.
