How Should a Retiree Invest Rs. 3 lakh to Generate Monthly Income?

If you are a retiree with an investible surplus of Rs. 3 lakhs, instead of allowing it to lie idle in your savings account, you can invest it in various financial instruments to generate a monthly income. The Indian financial markets offer many avenues through which you can do so. Read on to know more.

Investing in a non-cumulative bank fixed deposit (FD) can help you, as a retiree, to earn a monthly income. Note that in a non-cumulative deposit, you can choose to receive the interest pay-out on a monthly basis.
Bank FDs offer a higher rate of interest to senior citizens, and the returns are fixed throughout the tenure of the deposit. With net banking, you can invest in a bank FD within a few clicks.The certificate of deposit mentioning the rate of returns along with the tenure is given on the same day. However, note that the interest income is clubbed with your annual income and taxed as per the prevailing tax rates.

This is another prudent scheme in retirement income planning that can help you generate a monthly income. It’s a low-risk investment option, and the cap for investment is Rs. 4.5 lakhs (individual) or Rs. 9 lakh (joint).The tenure of the scheme is five years, and the interest is credited into your savings account you have with the post office. Another advantage of the scheme is that you can easily transfer it to another city where you move, and can re-invest the corpus post maturity for another five years.

This is another investment scheme which offers capital protection along with guaranteed returns. The pay-out received, however, is on a quarterly basis and even early retirees can invest in it. The maximum amount of investment is Rs. 15 lakhs, and you can invest in SCSS either through post office or commercial bank.The tenure of the scheme is 5 years, which can be further extended by 3 years. The scheme also allows premature withdrawals. However, such withdrawals are allowed only after a year. Investment in SCSS qualifies for tax exemption under section 80C of the Income Tax Act, 1961. In conclusion The avenues mentioned-above are latent to volatility and their returns don’t get affected by market performance. Investing in them, during your retirement income planning, assures capital protection along with fixed returns.

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.