Fluctuations of interest rates on bank deposits or fixed deposits are causing problems for senior citizens as many solely rely on interest earned on fixed deposits or other investments. Any reduction in interest rate by the government will give serious trouble to them.
Here, let's see the other alternative options available for senior citizens...
Senior Citizen Savings Scheme (SCSS)
Any individual who attains an age of 60 years can invest the retirement sum in the senior citizen saving scheme. Individuals who have retired on superannuation or those who took VRS can also open this account. Having said this, the account should be opened within a month after taking VRS and the minimum age should be 55. Most of the banks and post offices are offering this scheme. It also allows one to transfer the account from the bank to post office or vice versa.
All those who have opened accounts from April 1, 2017, will earn an interest of 8.4 per cent. The duration of this investment is 5 years and the interest amount gets credited into your account every three months, i.e., in the months of March, June, September and December.
Example: For a deposit of 15,00,000, he/she will earn an interest of Rs 31,500 for every three months. Tax is deducted at source if the interest earned is more than Rs 10,000. Both husband and wife can open the account jointly and the first person should have attained at least 60 years of age.
One can close the account after one year of opening the account, however, 1.5 per cent of the total amount will be deducted. 1 per cent will be deducted if the account is ditched after 2 years. After completion of 5 years, one can extend his account tenure for another 3 years.
LIC's Jeevan Akshay VI Plan
LIC is offering a unique plan named Jeevan Akshay VI plan. If a 60-year-old deposits Rs 1,000,00 in this plan, he/she will earn an annuity of Rs 6,530. Here money is paid in the form of an annuity. A 70-year-old will get Rs 6,620 and an 80-year-old will get Rs 6,760. One can also take back the entire sum in case of a serious health issue. Here the interest amount is paid immediately after 1 month from the purchase date.
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Pradhan Mantri Vaya Vandana Yojana (PMVVY)
The government of India had launched this scheme on 4th May 2017, for all those who have attained an age of 60 years and above. Anyone interested in this scheme should join before May 3, 2018. One can earn a minimum pension of Rs 1000 and a maximum of Rs 5000.
The tenure of the policy is 10 years and if something happens to the account holder, then the entire sum will be paid to the nominee. One can also withdraw from the policy within 30 days of opening the account. Currently, the rate of return is 8 per cent to 8.30 per cent (the exact rate of interest depends on whether you want to get paid every month or 3 months or 6 months or yearly).
With a minimum deposit of Rs 1,50,000, a senior citizen will earn a pension of Rs 1,000/month. The maximum price of the investment is Rs 7,50,000 that again earns a pension of Rs 5,000/month.
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