3 Retired Investment Options in India

The Indian financial markets offer ample retirement investment options to retirees to augment their pension and build an alternate source of income.
Safety of capital is of prime importance for retirees, and this article lists three such options which not cushions their investment from market volatility, but also provides a source of income.

A low-risk retirement investment option, post office monthly income scheme (POMIS) is one of the many deposit schemes offered by a post office. Retirees can invest up to Rs. 4.5 lakhs individually or Rs. 9 jointly in the scheme, which offers a monthly interest payment.With a tenure of five years, the interest is automatically credited into the savings account of the investor with the post office. However, note that the income received from POMIS is subject to taxation.
To open an account, collect the POMIS application form, and submit it with the required KYC documents along with photographs at the post office. Make sure to carry the originals along with you for verification.

Bank fixed deposits are another prudent investment option for retirees in India. All banks in India, private and PSU, offer FDs as one of their major offerings. Retirees, who are mostly senior citizens, can not only compound their wealth by investing in bank FDs, but also earn a higher rate of interest.If retirees choose non-cumulative FD, they can choose the interest payment frequency to be either monthly, quarterly, half-yearly or annually. Investing in bank FDs is pretty simple and straightforward. It can done either online or offline. The certificate of deposit along with the interest rate, tenure and maturity amount is given on the same day.Apart from regular FDs, retirees can also invest in tax-saving bank FDs which have a lock-in period of 5 years. Investing in them can help them lower their tax-outgo.

These are issued by government enterprises and offer assured income. As they are issued for a longer tenure, the risk of default is pretty limited. Also, interest income from these bonds is tax-exempt. At the same time TDS doesn’t apply to these bonds.However, note that these bonds have a long lock-in period of 10 to 20 years and you can’t liquidate them before that. The interest is credited on an annual basis. You can invest in these bonds through a Demat account.Investing in the instruments mentioned above not only offers security but also assured returns, something which make retirees extremely comfortable and give them peace of mind.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.