FD for regular income will have to be expensive! Now these are 5 better options where you are getting big returns, know the reason, It is better to invest money in these 5 schemes than investing in FD for regular income. Here you will get more benefit.
New Delhi. Interest rates on Fixed Deposits (FDs) are at their all-time low levels. That is, at this time if you want to invest in any financial institution / bank for regular income, then this is not a good time. For example, a three-year FD of State Bank of India (SBI) for senior citizens offers 5.80 percent interest. Interest of 5 percent is available on one year FD. The current inflation rate is around 5.59 percent. Hence, on a one-year FD, you would be earning only about the inflation rate, and could be lower on an after-tax basis, especially if you fall in the higher slab.
However, experts believe that if the interest rates on small savings schemes increase, then bank FDs will get more returns. However, it has not yet passed. In such a situation, if you are thinking of doing Fixed Deposit for regular income, then it will not prove to be particularly beneficial for you. In such a situation, today we are telling you about those opportunities in its option where you can earn big money on the deposit amount.
SCSS and PMVVY is a better option
Senior Citizen Saving Scheme (SCSS) is such a scheme, where senior citizens get 7.4% interest annually. The tenure of this savings scheme is 5 years, which can be extended for a further period of 3 years, if desired. Senior citizens can invest up to a maximum of Rs 15 lakh in SCSS. This scheme is for senior citizens who want higher returns on their investments.
In this scheme, interest is paid every quarter i.e. on quarterly basis. Apart from this, under Section 80C of the Income Tax Act, senior citizens can claim tax deduction of up to Rs 1.5 lakh on investments in savings schemes. This is a small savings scheme run by the government.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a retirement cum pension scheme for senior citizens run by Life Insurance Corporation (LIC). Under Pradhan Mantri Vaya Vandana Yojana, senior citizens get pension at 7.40% per annum interest rate, which is paid every month. Its duration is 10 years.
Post Office Monthly Income Scheme (Post office monthly income scheme)
through the post office monthly income scheme account (POMIS) India post you can find the income every month. The maximum investment allowed is Rs 4.5 lakh. At present, senior citizens are getting 6.6% annual interest in this scheme. This plan is also suitable for those who are below 60 years of age. This is a monthly income scheme with a tenure of 5 years. Once invested in this scheme, interest is earned at the same rate for the entire 5 years i.e. till maturity.
Company FDs and NCDs (Company fixed deposits and NCDs)
Private sector companies offer FDs and non-convertible debentures at high interest rates. However, there is considerable credit risk involved. Some state-owned companies also offer NCDs from time to time with slightly lower credit risk. Kulkarni says that FDs from large firms like HDFC offer monthly interest payments, and are a good investment option. These deposits can be made for a period of one to 10 years. As the tenure increases, the interest rate also increases. At present, 6.2 percent interest is available on HDFC FD of five years. Explain that many NCDs rated below AA+ offer interest rates up to 9 per cent for longer tenures.