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Best investment options for senior citizens in India for 2013

Best investment options for senior citizens in India for 2013

What are the good investment options available for senior citizens in India. 

Who is a senior citizen I am referring here

Senior citizens have completed 60 years of age and majority of his/her income sources are reduced or stopped, but the expenses are increased. The expenses can be medical expenses or regular monthly expenses.

What is important for senior citizens from investment perspective?

  1. Protection of capital
  2. Easy liquidity of funds
  3. Regular fixed income

What are not best investment options?

Before I talk about, what are good investment options for senior citizens, I would first talk about what are the options where a senior citizen should NOT be looking for.

  1. No to Investment in stocks : As the investments are risky in stock market, senior citizens would definitely want to stay away from these investments.
  2. No to Investment in mutual funds except for debt mutual funds : Though mutual funds provide some safety, but still they are directly related to stock market risks.
  3. No fresh account opening to investment in PPF/NSC : Since the period of investment for PPF is 15 years, it is not advisable to open a PPF account at this point of time. Similar with NSC where the duration is 5 years.
  4. No to investment in company deposits : You can see what is happening to one of the top company where Supreme Court has asked to return the company deposits to all investors. I feel senior citizens should stay away from company fixed deposit schemes where some risk is involved.

Best investment options for senior citizens in India in 2013

  1. Fixed deposits : Fixed deposits are one of the good investment options for senior citizens which offer 0.5% higher interest rates to them comparing to others. Currently interest rates on fixed deposits are falling. However there are banks which are offering good interest rates on FD’s. This is one of the investment options where a senior citizen would definitely look for.
  2. Debt mutual funds : Thought I would not advice seniors to invest in mutual funds, with little risk, one can invest in debt mutual funds . The risk what I am talking is about getting the lower returns comparing to fixed deposits. Current returns from debt mutual funds are 8% to 10% per annum.
  3. Post office – MIS scheme : This is one of the best options for investment for senior citizens. One can invest for 5 years and get monthly interest credited to their account. Current interest rates on Post office MIS scheme is 8.5 % per annum.
  4. Senior Citizen Savings Scheme (SCSS) Account : This is a very good saving scheme for senior citizens offered by banks and Post offices and the interest is 9.3% interest per annum. The good feature is interest is compounded every quarter. Means the interest rate would be still higher. The minimum investment is Rs 1,000 and max is Rs 15 lacs and lock-in period is 5 years.
  5. Investment in gold : Investment in gold is ever green investment. If a senior citizen has already invested in gold ETF’s, they can continue to hold it, but they have a risk that gold prices may correct. By considering this risk, they can still hold the gold ETF’s

Conclusion : No doubt that senior citizens should look for protection of capital, however diversification of their investments, they can get higher returns. I felt these are the best investment options for senior citizens.

Friends, I do not know how many senior citizens would read this article. If you feel this is a good article, please pass this on to your parents, senior citizens whom you know and they may get benefitted. If you also feel that there are other good options which are not covered here, you can leave a comment, I would incorporate in subsequent articles.

Suresh
Best investment options for senior citizens in India in 2013

15 comments

  • nevil

    How to save tax for senior citizen if thwy fall in 10% – 20% tax bracket

  • Rahul

    Hi,

     

    I will be turning 60 in march this year (i.e. 5 months from now). I have an investment liquid of around 2-3 lakhs. Request you to please tell me if I should wait for becoming senior citizen or are their some other funds or deposits where I can invest and later be considered as a senior citizen.

    • Hi Rahulji, Couple of suggestions 1) Invest in a 1 year FD. Break the FD in next Oct-2014 and invest in Sr. Citizens FD scheme. If you invest for 6 months, your interest would be very less. Hence this suggestion. 2) You can invest in debt mutual funds, but they carry some risk. 3) Other best way is invest in liquid or ultra short term funds for 6 months. You can get anywhere between 3% to 4% for 6 months and then you can invest in Sr. Citizen’s saving schemes.

  • Bachubai

    Dear Mr Suresh

    I am a retired person aged 67. My sole income is savings and pensions. I would like to supplement my capital with regular returns from MF investment for a period of 1-3 years.I am risk averse and wish to secure the capital. Please recommend a suitable SIP based fund.Investing Rs 5000-8000 per month. Is a ULIP based fund suitable for me ? what are the disadvantages .Thanks. Your blog is very informative and helpful If possible please write an article about portfolio selections and assessment e.g. balanced /diversified etc.

  • hans raj dhawan

    I am a senior citizen and having income from bank fd's is Rs.3.45 lac in a year.

    my taxable income is Rs.2.45 lac, after deduction of Rs.1.0 lac (as saved under sec. 80-c), which is not taxable for senior citizen.

    can I give form 15-h to the bank for not to  deduct the tax at  source.

    pl.reply to my e-mail

    thanks

     

     

     

     

  • Vishesh Sharma

    Glad to see read the tips that you have mentioned for senior citizens, which shows a concern
    about their age and wealth factor. I would also like to mention here a lifetime investment for
    senior citizens which is a service apartment facility brought up by “The Golden Estate”. The
    service apartments have a certain age eligibility criteria for becoming a part of the community.
    To be a resident of the The Golden Estate, the resident has to be 55 years of age orabove. Also,
    they have a courteous housekeeping staff experienced in care keeping. You can also visit their site  www.thegoldenestate.com

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