Due to the volatility of the market, many people do not want to invest in it. There are many such fixed income investment options available for such people that they can choose from. Although many of these options are only for senior citizens or retired workers, yet there are some options in which one can earn interest income by securing their capital. Some of these schemes are such that there is also a guarantee from the government. Among these options, you can choose the best option for yourself according to the needs like regular income, pension, tax saving or long term goals. Given below are some such schemes, in which investment can be made to secure your capital and get the best returns. Although some of these schemes have to be taxed on the interest received, then take decisions after adjusting the returns and inflation after tax.
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Pradhan Mantri Vaya Vandana Yojana (PMVVY)
- Pradhan Mantri Vaya Vandana Yojana is a 10-year pension scheme and it is better for those who are above 60 years of age and want regular income on their investments.
- The interest rate on this scheme will depend on the financial year in which the investment is made. For the financial year 2021-22, assured pension will be available at the rate of 7.4 per cent per annum. At the same rate, the assured pension will be available for the entire period of 10 years.
- The amount invested is called the purchase price.
- You can opt for pension on monthly, quarterly or yearly basis which will be available in the form of arrears.
- Under this scheme, a senior citizen can deposit a maximum of Rs 15 lakh and get a maximum pension of Rs 9250 every month.
- The amount of pension under this scheme is not dependent on the age of the investor.
- This scheme can be purchased offline or by visiting LIC’s website and is available till March 31, 2023.
Floating Rate Savings Bonds 2020 (Taxable)
- Government-backed investment option Floating Rate Savings Bonds 2020 (Taxable) can be invested through SBI, Nationalized Banks and four private sector banks.
- The interest rate will change with the tenure of seven years. At present, interest at the rate of 7.15 per cent per annum is payable every half year.
- Interest on these bonds is paid on January 1 and July 1 every year. There is no option to pay interest on cumulative basis.
- A minimum investment of Rs 1 thousand can be made in this. There is no maximum limit. However, only a maximum of 20 thousand rupees can be invested in cash.
- Its interest rate is 35 basis point linked to NSC, in which 0.35 percent is fixed by more or less tax.
- Redemption will be allowed before maturity only in special categories of senior citizens.
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Senior Citizen Savings Scheme (SCSS)
- Senior citizens are a popular investment option. People who are 60 years of age or above can become a part of this scheme.
- Retired people at the age of 55-60 years can also become a part of it but in such a case the account should be opened within one month of receiving the retirement benefits and the amount not exceeding the retirement benefits will be deposited.
- This is a five year plan.
- More than one account can be openedTop 12 deposit schemes with higher returns for conservative investors but all together the deposit amount should not exceed 15 lakhs.
- The interest is fully taxable and will be clubbed under the head ‘Income from other sources’.
- After maturity, it can be extended for another three years within one year.
- It is getting interest at the rate of 7.4 percent per annum, which is payable on quarterly basis.
Sukanya Samriddhi Yojana (SSY)
- Sukanya Samriddhi Yojana is a 21 year long scheme for girl child.
- Under this scheme, accounts can be opened only in the name of girls younger than 10 years.
- The parents will have to deposit money in the account for 15 years and the scheme will continue without any investment for the next six years.
- Premature exit from the scheme can be done only in case of medical emergency. Apart from this, the account can be closed even if the girl turns 18 when her marriage is fixed.
- On attaining the age of 18 years, maximum 50% of the amount accumulated in the account of the girl child in her previous year can be withdrawn for her education.
- The investment amount gets tax exemption under section 80C and the interest amount is also tax free.
- At present, it is getting interest at the rate of 7.6 percent per annum, which is available on maturity.
Atal Pension Scheme (APY)
- APY is an assured pension plan administered by the Pension Fund Regulatory and Development Authority (PFRDA).
- Any Indian citizen of 18-40 years can get it opened.
- Under APY, on attaining 60 years of age, a pension of Rs 1000, Rs 2 thousand, Rs 3 thousand or Rs 5 thousand will be given every month.
- The subscriber will get monthly pension under APY. After his death the pension corpus which has accumulated at the age of 60 years of the subscriber will be given to his nominee.
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Public Provident Fund (PPF)
- PPF is a long term investment and one has to invest in it regularly for 15 years.
- After a period of 5 years, there is an option to exit in certain circumstances and you can also take a loan from the fourth year and can withdraw partial amount from it in the seventh year.
- A person can open only one PPF account in his own name and another account can be opened in the name of his child below the age of 18 years.
- A minimum contribution of Rs 500 and a maximum of Rs 1.5 lakh (inclusive of own and children’s accounts) can be made per financial year.
- The amount invested gets tax benefit under section 80C and the interest amount is tax exempt.
- After maturity, PPF accounts can be extended indefinitely in blocks of five years each.
- At present, PPF is getting annual interest at the rate of 7.1 percent but the interest amount will be available on maturity.
Kisan Vikas Patra (KVP)
- Any adult can buy KVP in his own name or in the name of a minor or two adults at the post office.
- A minimum investment of Rs 1000 can be made in this and there is no limit for the maximum.
- KVP can be transferred from one person to another in the name of another person or from one post office to another post office.
- It can be redeemed anytime after two and a half years.
- At present, it is getting interest at the rate of 6.9 per cent per annum.
- The amount deposited in this doubles in 124 months and interest along with capital is available on maturity.
Bank fixed deposit
- Bank FDs have long been the preferred option as a form of regular income. At present, it is getting 6 percent annual interest but it depends on the bank and FD tenure.
- Deposits up to Rs 5 lakh are insured under the Deposit Insurance and Credit Guarantee Corporation Act 1961.
Post Office Time Deposit Account (TD)
- Post office TD is same as bank FD.
- TD can be started for a period of 1, 2, 3 and 5 years but only TD of 5 years duration gives the benefit of section 80C.
- Interest is fully taxable and is added to ‘Income from other sources’.
- At present, TD earns interest at the rate of 6.7 per cent annually but it is calculated on a quarterly basis.
National Savings Certificate (NSC)
- A lump sum amount is deposited in NSC for five years.
- A fixed amount is available on maturity which is calculated at the time of investment.
- One can invest in it in multiples of Rs 100, Rs 500, Rs 1000, Rs 5000 and Rs 10 thousand.
- The interest is fully taxable but can be reinvested in the first four years to claim the benefit of section 80C.
- Currently, the interest rate on NSC is 6.8 per cent per annum.
Government Securities
- Government securities are issued by the government, so there is a 100% safe investment for investors.
- Retail investors in government securities like G-Sec and Treasury Bills can place bids through NSE trading members or through the NSE Gobid mobile app/web platform.
- Bid can be placed in a minimum of 10 thousand rupees and after that in multiples of 10 thousand rupees.
- There will be a capital gain or loss on exit before maturity.
Immediate Annuities
- Immediate Annuity Schemes are best suited for people who want a regular source of income throughout their life, whether the interest rates are low or high.
- At present, there are 7-10 different pension options which include life for self, pension for spouse after death and full corpus for heir after death of both.
- At present, pension or annuity is available at the rate of 5-6 per cent per annum and it is also taxable as per the income slab.
(Story- Sunil Dhawan)
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