Senior citizens investment instruments

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Hi,

What are good instruments for senior citizens to invest in? At this age safety of the principal becomes of utmost importance. Here are some that I know of-

1. FD- Not beating inflation nowadays.
2. PPF/EPF- Good and must for everyone but at retirement or when someone is 60 or plus the extension is allowed for t+10 years only.
3. Senior Citizens Savings Scheme- A joke as interest is giving quarterly. No compounding benefit. Fully taxable. Though in first year claim till 1.5l can be made. Not good if one has option 2.
4. Pradhan Mantri Vaya Vandana Yojana and annuities- Linked with LIC/insurance. The real return is crap.

Sure no risk no return, but for a senior citizen is there any instrument which can give equal to or a little more than the inflation rate?

Thanks

@guest_999 @bikidas2060 @andromeda @caks2006407 @dharmanath481

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Very difficult, you will have to visit some public sector banks(preferably smaller in size aka not sbi & pnb) & ask for some of their “exclusive senior citizen scheme” with good interest rate. Some public sector banks have this but they don’t advertise it & very few actually know/use it.

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guest_999 wrote:

Very difficult, you will have to visit some public sector banks(preferably smaller in size aka not sbi & pnb) & ask for some of their “exclusive senior citizen scheme” with good interest rate. Some public sector banks have this but they don’t advertise it & very few actually know/use it.

Info about all sarkari schemes is available online. Modi ne photo nahi lagvani saath?
Cooperative banks have these kinda schemes/higher interest rates about which there is no info online but no one knows whether they will be saved considering the ordinance was passed in June.

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guest_999 wrote:

Very difficult, you will have to visit some public sector banks(preferably smaller in size aka not sbi & pnb) & ask for some of their “exclusive senior citizen scheme” with good interest rate. Some public sector banks have this but they don’t advertise it & very few actually know/use it.

+1

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At present, nothing safe can give more than inflation rate. And a senior citizen should never take financial risk. Best option is Annuity for life of both spouse without return of capital.
This would give an idea of how much one can get
https://cra-nsdl.com/CRAOnline/aspQuot...ml

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panchabhut wrote:

At present, nothing safe can give more than inflation rate. And a senior citizen should never take financial risk. Best option is Annuity for life of both spouse without return of capital.
This would give an idea of how much one can get
https://cra-nsdl.com/CRAOnline/aspQuot...ml

Aren’t these annuity plans crap both return wise and service wise(I mean one is told lies to sell these kinda plans usually)

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billubakra wrote:

Aren’t these annuity plans crap both return wise and service wise(I mean one is told lies to sell these kinda plans usually)

Annuity plans are essentially reverse EMI where you pay a lumpsum upfront and get monthly returns for life. Obviously, if one opts for non-return of capital, then monthly returns are higher. Otherwise, it is similar to normal FD, with the difference that the rate of return is fixed for life, even when interest rates are going down.
For senior citizen, they imply a defined fixed income source.
Of course, one must be very clear to opt for pure annuity only, with no “added rider” BS.

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billubakra wrote:

Info about all sarkari schemes is available online. Modi ne photo nahi lagvani saath?
Cooperative banks have these kinda schemes/higher interest rates about which there is no info online but no one knows whether they will be saved considering the ordinance was passed in June.

I will update here once I get more info.

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panchabhut wrote:

Annuity plans are essentially reverse EMI where you pay a lumpsum upfront and get monthly returns for life. Obviously, if one opts for non-return of capital, then monthly returns are higher. Otherwise, it is similar to normal FD, with the difference that the rate of return is fixed for life, even when interest rates are going down.
For senior citizen, they imply a defined fixed income source.
Of course, one must be very clear to opt for pure annuity only, with no “added rider” BS.

Bro wherever the “insurance” part comes in, it is bound to be ugly at some point. It looks good on paper though. Is there anyone that you know who has taken these kinda annuity plans?

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billubakra wrote:

Bro wherever the “insurance” part comes in, it is bound to be ugly at some point. It looks good on paper though. Is there anyone that you know who has taken these kinda annuity plans?

Pure Annuity is not an insurance product. It is a life linked income product offered by Insurance companies.

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panchabhut wrote:

Pure Annuity is not an insurance product. It is a life linked income product offered by Insurance companies.

Jo companies yeh product de rahi hai, they have zero credibility. Atleast in my eyes.

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No idea,
Captial safety ==> FD
Little risk OK ==>Aditya Birla Sun Life Savings Fund, HDFC Ultra Short Term and SBI Magnum Ultra Short Duration Fund or NPS Tier 2

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caks2006407 wrote:

No idea,
Captial safety ==> FD
Little risk OK ==>Aditya Birla Sun Life Savings Fund, HDFC Ultra Short Term and SBI Magnum Ultra Short Duration Fund or NPS Tier 2

Thanks.
Fd’s only in big banks provide real safety but return is poor.
The ytm of these debt funds is even less than the fd rates.
Difficult times.

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billubakra wrote:

Thanks.
Fd’s only in big banks provide real safety but return is poor.
The ytm of these debt funds is even less than the fd rates.
Difficult times.

look at ‘Tax-Free Bonds’ like National Highway Authorities of India, Indian Railways Finance Corporation, REC Bonds
Liquidity is low so FD+Bonds may work well
Also read FD vs Debt funds there are some advantages with later

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caks2006407 wrote:

look at ‘Tax-Free Bonds’ like National Highway Authorities of India, Indian Railways Finance Corporation, REC Bonds
Liquidity is low so FD+Bonds may work well
Also read FD vs Debt funds there are some advantages with later

Liquidity plus lock in period in bonds. Not good for senior citizens.
Yes debt funds are very much beneficial for taxation purposes but considering that too in the current scenario the ytm is way too low.

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For senior citizens, who are NOT getting sufficient pension income, should only opt for any pension type income (NPS or similar).

They should NOT invest in FD or MF or Rental income, if they have children who are suffering with financial problems (or chances of getting into financial issues in future).

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DealLooter wrote:

What was decided finally??

My friend sent his parents some money from abroad. That money is a lot when converted to INR. His father asked me where can he invest. After getting replies from this thread, I told him that I am myself not sure lol

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Diversification is my mantra during these times.
I opened accounts in IDFC savings account with 4.5L to get 7% interest
FD with DCB bank again 4.5L when it was giving ~7%
NSC giving 6.8% lockin for 5 years

So with above parents can invest around 15L each, so 30L sorted for short, medium and long term.

Above recommendations are simple and straightforward.

If there are more funds available then go for debt funds, annuity, etc which are a lil complicated interms of returns and options.

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go for arbitrage funds, they give 6% tax-free returns for long term
good for larger amounts

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karanoshan wrote:

go for arbitrage funds, they give 6% tax-free returns for long term
good for larger amounts

tax free?

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jainashish85 wrote:

Diversification is my mantra during these times.
I opened accounts in IDFC savings account with 4.5L to get 7% interest
FD with DCB bank again 4.5L when it was giving ~7%
NSC giving 6.8% lockin for 5 years

So with above parents can invest around 15L each, so 30L sorted for short, medium and long term.

Above recommendations are simple and straightforward.

If there are more funds available then go for debt funds, annuity, etc which are a lil complicated interms of returns and options.

Debt funds ytm is less than 4%
Annuity too complex and the insurance part is meh.
NSC, lock in period.
You are right about fd’s of less than 5 lac in different small/risky banks. But again they are also not beating inflation. Plus one or more banks is fine more than that is just too much to handle for senior citizens.

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karanoshan wrote:

go for arbitrage funds, they give 6% tax-free returns for long term
good for larger amounts

Bro those are not recommended for senior citizens.

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billubakra wrote:

Bro those are not recommended for senior citizens.

It is safest among equity type
Debt ones have separate tax laws

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karanoshan wrote:

It is safest among equity type
Debt ones have separate tax laws

Don’t they require too much time of the investor, if one is going the direct route?
Yes debt one’s have separate taxation laws but debt funds nowadays aren’t giving any return.

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billubakra wrote:

Don’t they require too much time of the investor, if one is going the direct route?
Yes debt one’s have separate taxation laws but debt funds nowadays aren’t giving any return.

Use direct mf apps
Like zerodha, groww etc

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karanoshan wrote:

Use direct mf apps
Like zerodha, groww etc

Bhai arbitrage ko regularly monitor karne ki jaroorat nahi hoti?

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karanoshan wrote:

Use direct mf apps
Like zerodha, groww etc

Don’t sell your data, go for MFU. But no insights is the drawback.

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dhinchakrohit wrote:

Don’t sell your data, go for MFU. But no insights is the drawback.

How can one be sure that mfu isn’t selling anyone’s data?

Missing