As per a survey conducted by the Securities and Exchange Board of India for 2019, 95% of households prefer to opt for fixed deposits instead of any other investment scheme. Conducted across both rural and urban locations in the country, it represents the general approach of Indians towards increasing their lump sum available funds. This inclination receives a boost from financial institutions as they offer fixed deposit schemes like FD for senior citizen at attractive interest rates.
These term deposits come as investment options that can help create a substantial corpus and help the investor meet various financial goals. FDs also improve one’s financial stability provided by the likes of the provident fund after retirement. The availability of various schemes for fixed deposit only makes it further convenient to secure the future.
For example, schemes like FD for senior citizen can fetch returns higher than the regular FD scheme. It thus ensures that individuals above the age of 60 years have the financial security to rely on as and when the FD matures. The risk-free feature of these investments only makes them all the more attractive for retirees.
Some of the financial institutions in India like Bajaj Finance also bring additional features that make fixed deposit schemes for retirees more compelling for wealth generation. Now, take a look at some of the best features of an FD for senior citizen that helps ensure a secured retirement period.
FD scheme features for financial security during retirement
1.High interest earning
Investment schemes like FD for senior citizen come with interest earnings at a 0.35% higher rate than regular FDs. Add on the high returns offered by fixed deposits compared to other term deposits, such schemes for retirees a reasonable investment option. However, you must know where to invest for higher returns on your fixed deposit.
Consequently, individuals over 60 years of age can opt for an FD scheme courtesy the higher interest rates offered especially to them. If you choose a term of 1 to 2 years, you can successfully fulfil short term funding goals, while a long term allows you to create a substantial corpus through this investment option.
2.Stable earnings through the deposit term
While the availability of government schemes for retirees like provident fund offers the stability of finances, FD investment only boosts this stability.
You must, however, be careful in choosing the financial institution to invest with by making sure that these schemes are safe. To do so, you can check if they have acquired the top ratings in the market for these investment options like –
- MAAA from ICRA,
- FAAA/stable from CRISIL, and
- BBB from S&P Global.
3.Option to choose for periodic payouts
The most popular such schemes, which include FDs for senior citizens, bring along an option to go for periodic payouts. Note that these payouts are available with cumulative and non-cumulative FDs and not with cumulative ones. Financial institutions offer these periodic payouts at varied frequency namely –
Investors can choose either of these as per their suitability to meet regular expenses, bringing it among the reasons that make fixed deposit better than any other investment.
4.Flexibility to choose a tenor
Retirement term deposit schemes like FD for senior citizen also come with the flexibility of tenor. With the best financial institutions, you have an option to choose a tenor between 12 months and 60 months as per your suitability.
For individuals over 60 years, the risk of health complication increases due to their advancement in age. It thus calls for the need to have access to funds in a lump sum amount that can meet any medical urgency. Fixed deposit schemes come with a maturity period or tenor of investment ranging between 7 days to 10 years, suitable for both short-term and long-term liquidity requirements while guaranteeing corpus growth over the term.
5.Low-value amount to start with the term deposit
While a high-value investment is sure to fetch better returns, senior citizens who have limited funds can also opt for these schemes to earn substantial returns. You can thus opt for some of the high-return FDs in the financial market with an amount as low as Rs. 25,000.
An FD for senior citizen is thus one of the schemes you should invest in to plan your post-retirement life. Invest in FDs that offer the highest returns to maximise earnings. Also, make sure to opt for financers for additional facilities such as online account management, easy withdrawal terms, additional investment clause, etc.