After working all our lives, all of us dream of a happy and contented retirement. We seek to reap the benefits of all the savings that we have accumulated all our lives. It is more than a fact that we all know life is unpredictable and problems don’t come knocking on the door. The best thing to avoid feeling helpless in this time of life is to make yourself financially secure. There are many investment options in the market, but one thing that might get your attention as a better investment can be Fixed Deposit, as the interest rates on Senior Citizen FDs have been increased to 8.10 percent.
FDs are the most popular investment option in India, due to its guarantee of investment and secure returns. FDs were made popular by the banks as they introduced FDs in India, but with the advent of the Non-banking Financial Companies (NBFCs), Senior Citizens fixed deposits got better. There are NBFCs that not only offer high-interest rates but better services for elderly customers too. Here are the reasons regarding why you should invest in FDs right now.
- High-interest rates: The interest rates on senior citizen FD is now around 8 percent; and with the growing inflation, the interest rates on fixed deposits might reduce. With the interest rates as high as 8 percent, this might be an opportune moment for you to invest in FDs.
- For lower tenure: FDs can come with a rather long tenure that can become a matter of concern during the time of investments. Some NBFCs offer lower tenure on Senior Citizens Fixed Deposits that might help you with better returns within a shorter period of time.
- Taxation on FDs: The taxation policies change every year with the release of the new financial budget. The new budget may or may not be in your favour for taxation on FDs, and since the tax charges on FDs are low this year, it can be the best opportunity for you to invest in FD.
The benefits of investing in senior citizen fixed deposit can be understood with the following example:
Mr. Parab has just retired from his duties as a sales executive from a private company with INR 3 lakhs as savings from his provident funds. He has been a good father and has managed to get his daughter married without the help of any loans or debt. Mr Parab is now alone with his wife, and they have a meagre monthly expenditure of INR 20,000. After separating INR 1 lakh for his personal expenses, he has decided to invest the remaining sum of 2 lakhs in Senior Citizen Fixed Deposits. With considerable, 8.15 percent of the Interest rate on Senior Citizen FD offered, he has decided to invest with an NBFC for a period of 3 years.
The calculation of his returns will be as such: If Mr Parab decides for a yearly compounded interest, then his earnings will amount to INR 16,300 per year. That means at the time of maturity Mr. Parab will have INR 48,900 as his earnings from his investments, as this amount is taxable under the TDS rule Mr Parab has saved himself from the taxes by applying for 15H, this enables him for tax exemptions by gaining maximum benefits from his investment.
The conditions in the above example of Mr Parab is the current condition of Senior Citizen Fixed Deposits. This means that you too can benefit from your retirement savings just like Mr. Parab as this is the right time to invest in FDs for senior citizens.