The retirement phase of your life means the end of your regular income stream. As a result, it is crucial to plan your investment and find the best possible results, and that too without bearing too much risk. In this regard, one investment option that comes to mind is the senior citizen FDs.
Financial institutions across India offer the best FD rates for senior citizens, which is usually 0.5 to 1% higher than that of investors under 60. Now, a higher interest rate is one of the factors that is attracting investors toward FDs, but there is more to the story.
6 reasons to opt for FDs as your investment option after retirement
Here are some reasons highlighting why FDs are the perfect investment vehicle for you following retirement:
Meeting recurring and non-recurring expenses alike
As a retiree, you likely have regular expenses to cover, but you may also have long-term financial aspirations to think about. Now, irrespective of your financial goals, FDs are a great way to manage them. The minimum amount for Fixed Deposit is as low as Rs.5000-100000 and the minimum investment tenure is as small as 7 days.
Therefore, laddering your FDs over multiple periods and according to different objectives will help you easily meet your monetary obligations. In this manner, you may meet your needs on time without worrying about running out of money.
Source of regular income
FDs for senior citizens are also a great source of regular income for them. Once invested, they have the liberty to earn their interest income monthly, which means they can use FDs to meet their day-to-day expenses.
Avail of a loan in emergencies
In case you need to meet a financial commitment, but you do not want to break your investment, then FDs allow you to mortgage them and take a loan. Moreover, as a secured loan, the interest rate will be comparatively lower, and it will be easy for you to pay off the debt. Furthermore, you can still keep earning interest on your investment until it matures, which is an added bonus.
Easy to liquidate
Another major reason why you should opt for FDs is that they are easy to liquidate. This means if you don’t want to use them as collateral, then users can get access to the funds by paying a penalty fee. Now, every financial institution does not impose this fee, so check for it while investing and its related terms.
Guaranteed returns
Fixed Deposits do not fluctuate with the market like stocks and mutual funds. Because of this, you may rest assured that your returns will be stable throughout the term. Furthermore, the FD calculator allows you to predict your returns in advance and plan accordingly.
Easy to invest
Fixed Deposits offer the ease of investment that is hard to find in any other investment instrument. You can easily start your investment online using the website or mobile app of your preferred bank.
Opening a Fixed Deposit account (FD) with multiple banks can be completed online, and you can also invest with a debit card by visiting a local branch. Furthermore, a multi-deposit option is available for those who wish to invest in multiple FDs simultaneously. In this case, you can split a single check among up to five distinct Fixed Deposit schemes, each of which can have its minimum amount for a Fixed Deposit and maturity date.
You can also keep tabs on your FDs with the same ease. Generally, you don’t need to monitor the performance; all you need to do is keep an eye on its maturity, as the FD interest will be constant during the term. Automatic renewal is a feature provided by some issuers. Because of this feature, your maturity proceeds will be reinvestment-automatically reinvested when the tenure finishes. To further simplify the process of investing, you can also choose to do it online or use doorstep services.
Wrapping it Up
Hopefully, now you have a clear idea of why senior citizens should consider FDs as their ideal investment option. So, if you have any more queries or confusion, you can contact the bank representatives and find answers to your questions.
