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A typical diversified portfolio consists of a mixture of asset classes such as stocks, bonds, fixed deposits, cash, commodities etc. The diversification of funds essentially helps in minimising the risks in your portfolio by limiting the risk exposure to any single asset or investment.The Government of India, through the Ministry of Social Justice and Empowerment, has framed numerous policies pertaining to the welfare of senior citizens. The Government has rolled out a host of banking benefits for its senior citizen population to make the Indian banking system inclusive and affordable.Here’s a list of some of the schemes offered- Senior Citizen Savings Account Various nationalised, as well as private banks, offer the service of a specialised savings accounts dedicated solely to senior citizen customers. Such exclusive accounts facilitate customers with priority service, higher interest rates, senior citizen cards, dedicated senior citizen desk for front-end service, discounts on other ancillary services like issuance of a debit card, etc. Senior Citizen Savings Scheme (SCSS) The Senior Citizen Savings Scheme (SCSS) is a government-sponsored savings instrument dedicated to the welfare of senior citizens in India. It is a voluntary account that can be opened with a minimum deposit of one thousand rupees or any sum in multiple of one thousand rupees, subject to a maximum of fifteen lakhs rupees.The Senior Citizen Savings Scheme (SCSS) yields an attractive rate of interest, which usually lingers in the 8% to 8.5% bracket. In order to be eligible to avail the benefits of the scheme, the subscriber needs to an individual who has attained the age of:
- 60 years and above
- 55 years or more but less than 60 years and who has retired on superannuation or otherwise on the date of opening an account
Higher Interest Rates on Fixed Deposits Senior citizens prefer investing their funds in debt instruments as an individual’s risk appetite declines with age. Fixed Deposits have been a time-honoured investment choice for every individual in India. They are synonymous with savings in India, as every Indian household swears by banks.Fixed deposits generate a steady income through interest, which is paid out at regular intervals. Several banks in India offer marginally higher interest rates to its senior citizen customers. This premium usually ranges between 0.25% to 0.5% per annum.Additionally, the Income Tax Act also offers tax benefits to senior citizen assessees under section 80TTB of the Income Tax Act, 1961. Under this section, interest earned on deposits held with banks is exempt from tax, up to a maximum of fifty thousand rupees.Thus, banks keep coming up with concession programs and discount offers dedicated to senior citizens, and these measures help senior citizens mitigate their financial needs.
DISCLAIMER
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.