Senior Citizen Savings Schemes for FY 2019-20 for PPF, NBFC´s FD, TDS

Senior citizen savings schemes were launched by the Indian Government with assistance from the country’s leading financial institutions and NBFCs. Such savings schemes serve as an additional income source post-retirement and help stay financially prepared to tackle unforeseen medical and personal emergencies in old age. They also instill a habit of saving on a regular basis.

You earned, you intended, and also you conserved. The keynote of retired life preparation is to prepare for a risk-free flow of income to fulfill regular expenditures post-retirement and even manage to have a respectable life after the monthly income has quit yet, not the rising cost of living. Sometimes, it may additionally obtain hard to suffer the very same requirement of living if you have stopped working to invest sensibly during your working life.

Yet then thinking you did not tumble making investments and also your smart monetary planning paid you some significant amount, do you precisely know where to invest your retirement money now? To get the best out of your retirement corpus, you must continuously invest in promoting your lifestyle and also putting up with the rising cost of living issues.

These savings schemes offer security and safety of your invested capital as they are mostly backed by a government or credit bodies like CRISIL and ICRA. Some of the top savings schemes in India for the Financial Year 2019-20 are:

  • Fixed Deposit

Investing in a Fixed Deposit from companies like Bajaj Finance allows you to avail of an interest rate of up to 8.35%. Plus, Bajaj Finance FD provides an additional return of 0.35% over the standard FD rate. It paves the way for one of the best investment avenues for senior citizens to invest in life’s savings and enjoy the benefit of safe and assured returns. 

Furthermore, senior citizens also have the option to choose between periodic payouts to fund their necessary expenses. You can invest in a combination of cumulative and non-cumulative senior citizen FD to accumulate a corpus for future use or create a channel for steady income. This way, you can earn higher returns with the Bajaj Finance Fixed Deposit, ladder your investments with time, and earn better returns.  

Bajaj Finance FD also carries a tax deduction for investments up to Rs. 1.5 Lakh p.a. under Section 80C of the Income Tax Act. For instance, if one invests Rs. 1 Lakh in this FD scheme, and he/she is in the 10% tax slab – he/she will save Rs. 10,000 as tax exemptions. 

  • PPF (Public Provident Fund)

Apart from fixed deposits, PPF is one of the safest investment options for senior citizens. It also offers tax benefits, allowing your income earned from taxes exempt from TDS. Thus, any contributions made towards the PPF scheme. As well as the generated interest on investments is also tax-deductible under Section 80C. 

Senior Citizen Savings Schemes
Senior Citizen Savings Schemes

You can opt for this scheme from the country’s leading financial institutions. And post offices, for a maximum duration of 15 years. Once the sum invested attains its maturity. The duration of the scheme can be increased up to 5 years. Here, the rate of interest is only compounded on a yearly basis, unlike a senior FD. In the case of an FD, the interest rates are compounded quarterly, biannually, or annually. This is how fixed deposits bring more to the table than you imagined.   

  • SCSS (Senior Citizen Savings Schemes)

Launched to help senior citizens of India, SCSS offers a steady channel for income with minimal risks. The duration of the Senior Citizen Savings Scheme is 5 years, and the rate of interest is 8.7% per annum. 

The investment ranges from Rs. 1000 to Rs. 15 Lakh from financial institutions or post offices. Investments under SCSS are also tax-deductible under Section 80C of the Income Tax Act. However, a drawback of SCSS is that you cannot draw a loan against the accumulated corpus as in the case of Bajaj Finance FD.

  • Atal Pension Yojana

The principal aim of the APY scheme is to benefit individuals employed in the unorganized sector. Hence, providing financial assistance from the Indian Government. However, individuals without pension benefits pay a negligible premium towards the APY scheme. After retirement, your pension will include this fund.

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The pension amount depends on the amount of your contribution to the scheme. However, the beneficiaries of the APY scheme are not permitted to get assistance from any other savings scheme like a senior citizen FD. Besides, the pension payment under Atal Pension Yojana is taxable. 

Each of these schemes comes with its set of advantages and drawbacks. But, considering the benefits offered by various savings schemes for senior citizens. It is advisable to go for a fixed deposit. This is because, with a, you can not only maximize your retirement savings but also enjoy other benefits like – obtaining fixed returns against market-related risks and even receiving guaranteed returns in times of economic turbulence.

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