Senior Citizen Savings Scheme (SCSS), #FD to GoI #Bonds: Top investment options for senior citizens

Best investment options for senior citizens during #coronavirus pandemic: The financial lives of senior citizens have been affected by the coronavirus outbreak &

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subsequent lockdown as they generally deal with their investments through visits to banks or post offices.

Here are some investment options a senior citizen may consider : GoI Savings Bonds GOI Savings Bonds (GoI taxable bonds) are also referred to as #RBI bonds.

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Sovereign guarantees back these bonds, and they come with 7.75% interest rate.

The scheme has two options:
non-cumulative option where interest is paid out bi-annually and cumulative option which pays interest on maturity.

There is no capping on the amount investible in

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these bonds but earnings are taxed as per income tax slab.

The lock-in period for investors in the age bracket of 60-70 yrs is six yrs, while it is five years for those aged 70-80 yrs.

The lock-in period for those aged above 80 yrs is only four yrs.

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Premature surrender of bonds is permitted only on 1st Aug & 1st Feb after the minimum lock-in period is completed.

Penalty for premature surrender of bonds is 50% of interest due payable for the last six months of holding period.

Fixed deposits with banks Bank fixed

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deposits (FDs) offer a fixed rate of interest over the investment tenure which varies across banks. Senior citizens are provided with 0.25% to 0.5% higher interest rate.

Interest rate is revised periodically, but amidst the unprecedented developments, banks have been

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forced to lower interest rates on the bank deposits.

This has affected senior citizens as they mostly rely on the interest income from their bank deposits.

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