When you are young with lesser responsibilities, you may assume higher risks while investing. However, as you age and retire, you would like to invest in safe instruments like fixed deposits (FDs).
Customized FDs are an excellent option that can help you earn guaranteed returns at minimal risks. Most non-banking financial companies (NBFCs) offer these deposits for senior citizens aged over 60.
Senior citizen FDs are available for a pre-determined period and offer a guaranteed rate of interest; they have a fixed maturity date. Here are five advantages of FDs for senior citizens:
- Higher interest
One of the biggest benefits of these FDs is the higher fixed deposit interest rates. Generally, issuers offer 0.25% more as interest for seniors as compared to regular investors. This allows you to earn more from your investment.
- Flexibility
With a non-cumulative FD, you may choose to receive the interest either quarterly, half-yearly, or annually as per your financial situation. This enables you to meet household expenses and various other costs. Alternatively, you may opt for the cumulative scheme that adds the interest to the principal, providing higher returns on investments. You may use this money to pay for your grandchildren’s education or other financial goals.
- Security
Compared to market-related investments like equities, mutual funds, and money market products, FDs are low-risk products. As the FD rates are not linked to market movements, these investments offer a steady source of income during your senior years.
- Small corpus
Most issuers give you the opportunity to open an FD with a small corpus. You may start an FD with a minimum amount ranging from INR 5,000 to INR 50,000 as per your financial situation.
- Quick and simple procedure
The online process to open an FD is fast and easy. The fixed deposit eligibility criteria are simple; you only need to submit an age proof while starting a senior citizen FD. Additionally, you may avail of a loan against the FD without any hassles to meet any emergency fund requirements.
Now that you have understood the plus points of senior citizen FDs, check out the corporate fixed deposits offered by Mahindra Finance on the company’s website, and make a wise investment today.