World Thrift Day

World Thrift Day

They say Fixed Deposits are “the tool” for senior citizens. And so, over the past decades, government organizations and banks spread across the private and public sector have initiated various yojanas and schemes in favour of senior citizens. It is the most secure form of investment, safe from market fluctuation and many times, is the only source of income for senior citizens.

While the implementation part of all of these is debatable, there are some of the schemes such as the Senior Citizens Savings Scheme (SCSS), National Pension System (NPS) and Pradhan Mantri Vaya Vandana Yojana (PMVVY) known to be among the more prominent and safer ones.

On account of the World Thrift Day, also known as World Savings’ Day 2020, we have listed some of the most beneficial schemes that all senior citizens can avail and take advantages of –

Interest Rates for all the banks below is 7.4% or as per rates decided by the government.

BankEligibilityDeposit
Post Office(i)  An individual above 60 years of age.
(ii) Retired Civilian Employees above 55 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits.
(iii) Retired Defence Employees above 50 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits.
(iv) Account can be opened as individual capacity or jointly with spouse only.
(v) The whole amount of deposit in a joint account shall be attributable to the first account holder only.
Minimum deposit shall be Rs. 1000 and in multiple of 1000, subject to maximum limit up to Rs. 15 lakh in all SCSS accounts opened by an individual.
SBI(i) An individual may open an account in individual capacity, or jointly with spouse.
(ii) NRI’s & Hindu Undivided Family are not eligible to open an account under these rules.
(iii) An individual who has attained the age of 60 years and above.
(iv) Individual who has attained the age of 55 years or more but less than 60 years and who has retired on superannuation or otherwise on the date of opening an account.
(v) The retired personnel of Defence Services attaining the age of fifty years.
A minimum deposit of one thousand rupees or any sum in multiple of one thousand rupees not exceeding Rupees Fifteen lakhs.
Bajaj Finserv(i) An individual must be a citizen of India. Non-residential Indians (NRIs) or a person of Indian origin (PIOs) are not eligible to avail this feature. Also, Hindu Undivided Family (HUFs) do not qualify for this scheme.
(ii) As this is a senior citizen savings scheme, so any resident of India aged 60 years or above is eligible for this scheme. However, there are few exceptions to the age bar:
• Retirees in the age group of 55-60 years who have opted for Voluntary Retirement Scheme (VRS) or Superannuation are eligible to avail the scheme if they apply for the same within one month of gaining their retirement perks.
• Retired defense personnel can avail this scheme irrespective of their age, provided they fulfil all other conditions.



Minimum deposit amount of Rs. 1000.
ICICI(i) An individual attained the age of sixty years on the date of opening of the account; or
(ii) An individual attained the age of fifty-five years or more but less than sixty years, and who has retired on superannuation or otherwise on the date of opening of an account under this Scheme, subject to the condition that the account is opened by such individual within one month of the date of receipt of the retirement benefits and proof of date of disbursal of such retirement benefit(s) along with a certificate from the employer indicating the details of retirement on superannuation or otherwise, retirement benefits, employment held and period of such employment with the employer.
(iii) The retired personnel of Defence Services (excluding Civilian Defence employees) shall be eligible to open an account under this Scheme on attaining the age of fifty years, subject to the fulfilment of other specified conditions.
(iv) Nomination under this scheme can be done only in favour of resident Indians.



Minimum deposit: Rs. 1000 and in multiples thereof
 
Max deposit: 15 lakhs

Pradhan Mantri Vaya Vandana Yojana

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme operated by the Life Insurance Corporation (LIC) is a low-risk investment pension plan. The tenure can be extended up to a maximum of 10 years with the rate of interest fixed at 8% p.a.

The pension receivable under the scheme will range from Rs.1,000 to Rs.10,000 per month depending on the amount you have invested. To avail the scheme, you will have to make an initial investment not more than Rs.15 lakh on or before 31 March 2020.

National Pension Scheme (NPS)

The National Pension Scheme can be availed by individuals between the ages of 18 and 65 years. Senior citizens can extend the tenure up to the attainment of 70 years of age as well. Under Section 80C, taxpayers are eligible for deductions up to Rs.1.50 lakh on the investment made towards NPS. Similarly, under Section 80CCD, individuals are also eligible for additional benefits up to Rs.50,000.

The investment made towards the NPS scheme can be directed towards equity bonds or debt bonds, or both depending on the individual’s choice. Though NPS does not offer a steady rate, the scheme generates excellent returns and your investment can grow at a faster rate by orienting your NPS towards equity funds.

Moreover, according to section 80TTB in the Income Tax Act, interest amounts received up to Rs 50,000 on deposits held with banks, co-operative banks or post offices are effectively tax-exempted. This tax exemption works as follows: A senior citizen can claim deduction of up to Rs 50,000 interest income earned from these entities as deduction from gross total income before levy of tax as stated above.

Further information on the above mentioned schemes and plans can be found on government websites and the company websites. 

After all, they say ‘Good things come to those who thrift’. Happy investing!

Sources:

https://economictimes.indiatimes.com/wealth/invest/top-5-senior-citizens-bank-fixed-deposits/articleshow/66916113.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

https://www.indiapost.gov.in/Financial/pages/content/post-office-saving-schemes.aspx

https://sbi.co.in/web/personal-banking/investments-deposits/govt-schemes/senior-citizens-savings-scheme – sbi

https://www.icicibank.com/Personal-Banking/investments/senior-citizens/features.page

https://www.bajajfinserv.in/senior-citizen-savings-scheme – bajaj finserv

https://cleartax.in/s/best-investment-options-pensioners-senior-citizens

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