Going by the 2011 Indian census figures, there were 103.9 million senior citizens in the country. The next census figures will be released by 2022, and the number of people aged 60 years and above is likely to rise by 3.5% every year.
Traditionally, senior citizens or risk-averse investors consider investment schemes such as fixed deposits for substantial, and most importantly, secured returns. Today, multiple financial institutions offer FDs at high fixed deposit rates along with attractive features that make them a suitable investment option without the need to undertake market risks.
In the last decade, economists have noticed changes in the ways Indian youngsters are investing. Nevertheless, FD remains a suitable investment option for those who want to park their funds in risk-free avenues for sustained corpus growth over the years. It is primarily due to assured returns at high fixed deposit rates.
Given the market volatility, the risk appetite of most investors remains low. They can thus consider the following 7 alternatives for better yields, but with significantly lower risk threshold.
Investing in gold is always a good idea for a very simple reason; gold continues to be one of the few assets which appreciates in value over time. Gold Jewellery is a staple in Indian marriages, and investors are always on the lookout for Gold ETFs and coins. The Gold ETFs can be traded at stock exchanges including the NSE and BSE. Another option of owning gold is via owning Sovereign Gold Bonds.
RBI taxable bonds
It is a low-risk alternative to a fixed deposit. The central government has replaced the erstwhile taxable RBI bonds with a new version that provides 7.75% savings. They have a minimum tenor of 7 years. Each holder of such a scheme is issued a Certificate of Holding, which is a proof of ownership.
Sukanya Smariddhi Yojana (SSY)
The Government has introduced the Sukanya Samriddhi Yojana online. It is a short-term, high-return scheme with interest rates as high as 8.5%. A family with a girl child can open a savings account in any financial institution with deposit amounts as low as Rs. 250. The eligibility requirement to open a Sukanya Smariddhi Yojana online account is simple and straightforward, and offers risk-free returns, thus making them suitable investment avenues.
A fixed deposit is a risk-free investment tool that comes with attractive interest rates for substantial corpus creation over a pre-specified tenor. Renowned financial institutions offer high fixed deposit rates of up to 8.35% p.a.
It thus allows investors to maximize their investment amount. Financial institutions like Bajaj Finance also offer periodic payout option that allows individuals to generate regular income through their invested amount. The facility is primarily suitable for senior citizens who have low to no steady income and the lowest risk appetite. Make sure to compare different financial institutions to choose the best FD plan in 2019.
Public Provident Fund (PPF)
PPF is another suitable investment option to go for, a government initiative that offers high, risk-free returns against affordable investments. As the maturity amount of a PPF is exempt from tax, individuals looking for tax-saving investments will also find it suitable. Nevertheless, interest rates offered under the PPF scheme are lower than fixed deposit rates.
National Pension Scheme (NPS)
Another government-backed scheme, NPS brings a profitable investment avenue for individuals looking for high returns with diversified risk. It thus allows you to invest in market-linked instruments for better than average returns. It, however, comes with a lock-in period of 3 years.
Arriving last in the list of investments offering high returns against low risk, mutual funds provide market-linked benefits. Based on the type of funds chosen, investors can conveniently diversify the risk through mutual fund investments and earn returns as per market performance.
While investment options like Sukanya Smariddhi Yojana online help create a substantial corpus, fixed deposits offer extensive benefits. Compare the investment options carefully to park your funds and choose the right financial instrument that helps maximise your wealth as per your financial requirements.