A
fixed deposit as we all know provides a safe haven for investments as it offers
guaranteed returns. There are many customized FDs available to suit the needs
of each individual or investor. From part-time working students to young office
goers, doctors, cab drivers, chartered accountants, housewives and even retired
individuals like senior citizens can make use of FDs. If you wish to gift your
dad or an aged family member, complete independence during their golden years
of life, then a senior citizen FD is the best bet.
Current
Exemptions and Benefits
Senior
citizens receive many benefits when it comes to their finances, like Section
80TTB. As per this clause, deposits up to Rs. 50,000 will be exempted. This is
quite an increase from the previous limit of Rs.10,000 and enables the senior
citizen population to be free of Section 80TTA.
Filling
up and submitting Form 15H can help to avoid TDS on your returns from FD. Also,
a fixed deposit doesn’t get affected by market fluctuations. A non-cumulative
fixed deposit helps to get regular returns like a monthly term which will help
to receive the kind of money that one is used to while working in a job.
A
senior citizen who has been there, and seen it all, wishes to spend the rest of
his time with dignity and his head held high. An FD does just that and makes
sure that your dad could maintain his previous lifestyle and never needs to
approach you for his financial needs. Other than banks, NBFCs (Non-banking
Financial Companies) such as Bajaj Finance offers 0.35 % higher interest rate
to senior citizens than their normal interest rate. Investors can also
calculate their returns in advance before investing through FD Calculator. They can
even track their FD through the online account provided by banks and financial
institutions.
How
to Select the right FD?
Doing
enough research is also imperative before zeroing in on an FD. For example, there
are many financial institutions other than banks, which provide fixed deposits.
However, many of those fixed deposits are unsecured loans. The deposited amount
is not insured at all. To avoid such investments, check the credit rating of
that firm. Rating like AAA is considered a safe and stable form of FDs. Bajaj
Finance has CRISIL’s FAAA and ICRA’s MAAA rating when it comes to safety
standards.
It
also provides the option of flexible tenors for senior citizens FD in the
range of 12 to 60 months. Many fixed deposits aimed towards senior citizens are
flexible and can accept initial deposits around Rs. 25,000. However, you must
make sure to check the safest investment options for senior citizens before
investing.
Application
Process Tedious!
The
application process has also become quite easy through online mediums. The long
queues have almost disappeared and the documentation process for FDs have
become less tedious with just your photograph and a KYC document required for
submission.
Low-Risk
Investment
A
fixed deposit is generally considered as a low-risk investment. However, one
should look at the terms and conditions. Else, one may get average returns on
their FD investments. For the convenience of senior citizens, many online apps
and websites are trying their best to make their interface user-friendly. Apart
from this, firms are making efforts such as Bajaj Finance to guide senior
citizens on choosing the best FDs and financial schemes.
Gifting
an item to someone on his or her special day is a way to show your appreciation
but to give something which appreciates their value is indeed a gift.