For a senior citizen, an funding instrument that has minimal threat or zero threat is the best option to park cash. That’s why financial institution mounted deposit (FD) is essentially the most favoured funding software among the many sixty plus inhabitants. However, the way in which financial institution FD rate of interest has been nosediving; senior residents are unable to beat the inflation development charge by investing in financial institution FD nowadays. So, for them central government-backed Senior Citizen Saving Scheme (SCSS), which is 100 per cent risk-free, is advisable. Senior Citizen Saving Scheme rate of interest is 7.4 per cent, which is way greater than the common inflation charge of 5.5 per cent to six per cent. However, if we go by the tax and funding specialists’ view, financial institution bonds can be a greater possibility for senior residents who’re on the lookout for choices aside from financial institution FD.
Highlighting the options of Senior Citizen Saving Scheme or SCSS Kartik Jhaveri, Director — Wealth Management at Transcend Consultants mentioned, “Senior Citizen Saving Scheme or SCSS is fully debt instrument and it is 100 per cent risk-free. As per the latest announcement by the central government, the small saving scheme is currently giving 7.4 per cent annual return to the senior citizens investing in this scheme.”
However, Jhaveri suggested senior residents to have a look at financial institution bonds because it provides round 9 per cent annual return to the investor. He mentioned that like SCSS, financial institution bonds are additionally 100 per cent risk-free as Government of India (GoI) is the guarantor of the cash obtained by varied banks from the buyers.
On why not authorities bonds, why financial institution bonds Jhaveri mentioned, “Unlike government bonds, bank bonds are always available for investing but to buy bank bond, one needs Demat Account.”
On why not authorities bonds, why financial institution bonds Jhaveri mentioned, “Unlike government bonds, bank bonds are always available for investing but to buy bank bond, one needs Demat Account.”
Speaking on SCSS vs financial institution bonds; SEBI registered tax and funding knowledgeable Jitendra Solanki mentioned, “For opening a SCSS account one has to be at least 55 years of age while in the case of bank bond, there is no such age limit. Anybody can buy bank bonds at any age provided they have a Demat Account.” Solanki additionally mentioned that in SCSS, one cannot make investments above ₹15 lakh whereas in financial institution bonds; one can make investments any quantity out there for investing.
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