Fixed deposits are the best type of investment options since they are risk-free and the rate of interest is not easily affected by the volatility of the market. Many people think that you need a lot of money to get returns on your investments. But that’s not the truth you need to think practically to earn good returns on your investments.
There can be various reasons why people want to invest their savings like wanting a financial security, or saving for a future purchase, etc. If you have a low income per month, you can try to save some money and use that to open a fixed deposit. The interest that you receive can either be reinvested or you can use this money to spend it however you deem fit.
It is especially necessary to start investing if you are nearing your retirement age. Once you retire, the pension that you will earn is very less as compared to the monthly salary that you will be receiving and hence you need to save. There are increased medical expenses as well once you start growing old. Fixed deposits are the perfect options when it comes to saving for your retirement.
A lot of people start saving their pension once they retire. But this is not a wise option as you will not be able to get returns if you opt for saving. Having a fd is a low-risk investment option as compared to the rest of the investment options. If you are a senior citizen, there is a different type of fixed deposit called the ‘Senior citizen fixed deposit’ option available for you.
Here are some of the features of the senior citizen fixed deposit:
- This type of fixed deposit is similar to the regular fixed deposits and they too range from 7 days to 10 years.
- Under the nomination feature, you can appoint a nominee who would continue getting the benefits of the fixed deposit.
- You can close the senior citizen fixed deposit at any time and no penalty will be levied.
- The tenure of the fixed deposit will decide the rate of interest that will be offered to you.
- The maximum amount that you can invest will be dependent on the banks or lenders.
- Some banks offer a fixed deposit that has a lock-in period of 5 years and if you opt for this type of fixed deposit, it can help you save some taxes.
The rate of interest on a senior citizen fixed deposit:
The rate of interest that is offered on a fixed deposit is higher as compared to a savings account. The rate of interest that you receive is largely dependent on the banks and different banks offer a different rate of interest. The rate of interest that you receive also depends on the amount that you are investing. Banks provide a higher rate of interest for a senior citizen fixed deposit. Non-Banking Financial Institutions (NBFCs) provide a higher rate of interest as compared to banks and hence they are approached more.
Investing in fixed deposits allow your funds to grow in a steady and risk free manner. Since fixed deposits have an insurance of INR 1 lakh, your investments are safe even if the company or the financial institution is facing a financial difficulty. In the case of an urgent need of funds, you can withdraw up to 90% of the fixed deposit amount.
The senior citizen fixed deposit can be considered as the best options for investment because of all the perks that it provides.