When you reach the retirement age of 60, income sources can deplete, but daily expenses continue. To manage this, there are several schemes designed to provide regular income for senior citizens. Here are some of the best options:
Senior Citizen Savings Scheme (SCSS)
The Senior Citizen Savings Scheme (SCSS) is a government-backed savings instrument specifically for individuals over 60. It offers an attractive interest rate of 8% per annum. The scheme has a tenure of 5 years, extendable by another 3 years upon maturity. You can invest a maximum of Rs 15 lakh in this scheme. Interest is payable quarterly, ensuring a steady income stream.
RBI Floating Rate Bonds
The RBI Floating Rate Bonds offer an annual interest rate of 8.05%, subject to change. These bonds have a lock-in period of 7 years. The minimum deposit required is Rs 1,000, with no upper limit. Interest is payable semi-annually on January 1 and July 1, providing a consistent income.
National Savings Monthly Income Account (MIS)
The National Savings Monthly Income Account (MIS) is another reliable option. It allows a one-time deposit of up to Rs 9 lakh in a single account and up to Rs 15 lakh in a joint account. The scheme offers an interest rate of 7.4% per annum, payable monthly. This can translate to a monthly income of up to Rs 5,550 for a single account and Rs 9,250 for a joint account.
Systematic Withdrawal Plans (SWP)
Systematic Withdrawal Plans (SWP) allow retirees to withdraw a fixed amount from their mutual fund investments at regular intervals. This method provides flexibility and control over the investment, enabling senior citizens to manage their funds according to their needs. The amount withdrawn can be adjusted based on the investment’s performance and personal requirements.
Fixed Deposit (FD)
Fixed Deposits (FD) remain a popular choice for senior citizens seeking regular income. Many banks offer higher interest rates for senior citizens, typically ranging from 6% to 8%. The interest can be received monthly, quarterly, or annually, depending on the chosen option. FDs are considered safe investments with guaranteed returns.
By choosing the right schemes, senior citizens can ensure a steady income stream post-retirement, helping them manage their finances efficiently and enjoy a secure financial future.
