After retirement, the regular flow of income stops, and it impacts an individual’s financial health. Investing in fixed deposits is a great option for senior citizens to secure their future. It is important to minimise risks and ensure a guaranteed return when it comes to investment for older people. In old age, you cannot take risks and must secure your savings.
Senior citizens have many savings options, but fixed deposits are always the preferred choice for the low risks involved. Most importantly, you can enjoy the senior citizen fixed deposit interest rates higher than the normal FD interest rates. This helps you maximise your profits.
The low-risk factor in the fixed deposits account, makes investment companies contact senior citizens to open these accounts. Let us find out the reasons why senior citizens should invest in fixed deposits.
1. Attractive interest rates
Usually, financial organisations offer higher interest rates to senior citizens compared to others. These senior citizen fixed deposit interest rates offered by various financial organisations help you accumulate a greater amount at the time of maturity.
2. Auto renewal facility gives you better returns
You can choose this facility for your FDs to get renewed automatically. Your interest amount on maturity will be reinvested, which will multiply your returns because you will enjoy an extra interest rate for opting for auto-renewal facilities offered by many financial organisations.
3. FDs help seniors to fulfill both recurring and nonrecurring spending
Apart from fulfilling your routine expenses, FDs help you to deal with your nonrecurring expenditures. After retirement, you may have many pending things to do. These may include arranging a wedding for your daughter, buying a property for your children, closing your home loan, etc. To be able to pay off each of these purposes easily, you can rely on your FDs with different tenures. You will have a fund ready to be used for different purposes if you invest wisely in FDs.
4. FDs can be kept as a guarantee for a loan
Emergencies can knock at your doors at any time. Medical emergencies often come up with senior citizens. Several financial organisations offer loans based on your FD amount. This helps you in medical emergencies. You can instantly apply for such a loan online and avail of the amount. Without breaking your savings, you can rely on your FDs to handle emergencies in life.
5. Market fluctuations do not influence FDs
Fixed deposits can give you assured returns as frequent fluctuations do not influence them in the market. The interest rate will stay unchanged for the entire duration of your FD. You can quickly calculate the returns before opening an FD through an FD calculator and proceed with the best plan accordingly.
6. Easy investment
An online FD account opening takes a few minutes. So it is super easy to invest in FD, and you can do it online without visiting your financial organisation. If you are taking it from an organisation where you have a savings account, you can do it from the app. Otherwise, if you do it from another financial institution, you will require filling out a simple form and paying the FD amount. Alternatively, if you want, you can do it offline by visiting the nearest branch. This offline thing works better if you want to create several FDs simultaneously. The maximum you can invest in is 5 FDs. You can opt for a different duration and amount for each FD.
7. Easy monitoring
Keeping track of your FDs is also simple. As the interest rate will not change during the entire duration, you will not require keeping track of that. Only you need to remember the maturity period of each of your FDs.
8. Early withdrawal
You can withdraw your FD before the maturity period to fulfill your various financial requirements. If a health issue suddenly arises, you can immediately withdraw money from your FD accounts. You can withdraw a part of your FD money and let the remaining amount continue to accrue senior citizen fixed deposit interest rates and grow over time.
9. Tax deductions
You can enjoy tax deductions by investing in locked-in fixed deposits, according to the 1961 Income Tax Act. Senior citizens can get rid of the burden of paying TDS on the interest earnings or claim for a reduction of this amount. If you are comfortable with lock-in FDs, this is a wonderful option to save on taxes.
As you have seen, fixed deposits are the safest and most reliable investment option for the elderly lot. If you are interested, you can check the various senior citizen fixed deposit interest rates offered by the investment agencies in the market and go for the one that is suitable for your unique financial situation.