As a senior citizen, you deserve to live your golden years comfortably and without any compromise. Thus, it is important that you plan your finances in advance so that you can fund your regular expenses post-retirement with ease. Additionally, you must pay special attention to rising healthcare costs and thus, create substantial fiscal resources via strategic planning to fund such needs.
As retirement brings an end to your active employment years, when planning for this phase of your life consider investing in instruments that carry low risk. For instance, when you invest in a fixed deposit, you can enjoy guaranteed high interest rate on your investment. With a senior citizen FD, you can finance your lifestyle or even maintain the reserve of wealth that you created using your savings until now.
A senior citizen FD is of two types, bank fixed deposits and company fixed deposits. In order to choose the right FD basis your needs, look at the advantages of both below.
- Advantages of investing in bank fixed deposits
- The interest rate of bank senior citizen FD depends on the amount of investment and the tenor you choose. So, you can make the best use of this flexibility and invest for as long as you want while earning higher interest rates. Also, as a senior citizen, you can earn higher than those under the age of 60.
- Bank fixed deposits are safer because they are secured by the RBI for up to Rs.1 lakh. Therefore, even if the bank goes bankrupt or defaults on paying your money, you can get up to Rs.1 lakh as compensation for your FD.
- By investing in a bank FD, you can claim a tax exemption for both your investment as well its interest earnings under Section 80C of the Income Tax Act. Here, for your investment you can claim an exemption of up to Rs.1.5 lakh every financial year and enjoy an increased exemption limit of Rs.50,000 on your tax earnings for the FDs every year.
- Advantages of investing in a company fixed deposit
- Also known as corporate FD, a company senior citizen FD offers higher interest rate in comparison to a bank fixed deposit.
- The performance of corporate FDs depends on the company’s performance and liquidity factors. Therefore, for the safety of your funds, you can check the CRISIL ratings of any FD offered by companies. For instance, consider investing in a Bajaj Finance Fixed Deposit that has CRISIL ratings of FAAA. This means that your investment is safe and you enjoy the guarantee of receiving the maturity amount on time.
- Company FDs may also give you other perks like document pickup, online account management, easy online renewal of your FD and more.
When making your decision, choose between a cumulative senior citizen FD to get your interest payout at maturity on a non-cumulative FD to access periodic earnings at a frequency of your choosing. Both banks and companies offer this payout choice to you. Also consider various offerings before you choose one for yourself. For instance, Bajaj Finance offers Fixed Deposits for Senior Citizens ,a product tailor-made to cater to your retirement needs. When you invest in such an FD, you can enjoy various perks like minimum deposit amount requirement, minimal documentation and online account management among others. Also, Bajaj Finance’s Senior Citizen Fixed Deposit offers attractive interest rates. When you invest in a cumulative fixed deposit for at least 36 months, you can earn as high as 9.10% annually.
Now that you know the advantages of both bank FDs and company FDs, you can invest in the one that suits you best. Enrol for a suitable fixed deposit today to lead a financially healthy life after retirement!