Individuals who are on the verge of retirement mostly rely on fixed deposit schemes to fulfill their post-retirement investment and liquidity needs. Being a safer option than market-linked instruments it has been their go-to investment avenue to park their savings.
Despite lower interest rates than market-linked investments, senior citizens have preferred FDs because of reasons like additional interest rate benefit, easy investment method, better liquidity options, and safety of invested capital.
However, with banks reducing their FD rates by many points in the last few months, you might have to rethink and restructure your financial plans. Here are a few ways through which you can plan your retirement with fixed deposit schemes in India
High-interest earnings with corporate FDs
Since bank FD rates are lower than corporate FD rates, you can invest in FD plans offered by NBFCs. Some finance companies like Bajaj Finance are still offering fixed deposit interest rates up to 7.35% which is almost 2% higher than the highest FD rate you will get with a bank fixed deposit. This is one of the highest interest rates across fixed deposits in India.
Moreover, these FDs are also safe as they have been highly rated for their stability by credit rating organizations like ICRA and CRISIL.
Balancing investment growth and ongoing financial needs
As a senior citizen, you will need some funds to fulfill your monthly expenses and at the same time, you will also have to ensure steady growth for your savings. For achieving a balance between investment growth and financial needs, you can split your savings into two parts.
One part can be invested in cumulative FD of longer tenor so that you will receive the accumulated interest at maturity whereas the other part can be deposited in a non-cumulative FD with an option of monthly interest payout.
The multi-deposit facility offered by Bajaj Finance lets you invest in multiple FDs of different tenors and FD types. You don’t have to deposit separately for these FDs as a single cheque can be used to invest in all these FDs at once.
You can use this facility to split your funds for striking a balance between growth and financial requirements.
Use FD calculator for planning finances
If you aren’t sure about how to plan for your retirement, you can use an FD calculator. An FD calculator is an online tool that enables you to calculate the returns of different FD plans precisely.
Moreover, you can confirm your earnings based on various factors like tenor, customer category, investment amount, and FD type.
By gaining knowledge about the exact returns offered by various FD schemes, you can plan more efficiently for your post-retirement needs and savings.
Bajaj Finance offers an FD return calculator that lets you calculate FD returns of both cumulative and non-cumulative FDs at once to facilitate easy comparison. Also, you can apply for a loan by using your FD as collateral to fund your emergency needs. Apart from that, you get a 0.10% additional FD rate on booking an online FD using an online FD form and an additional interest rate benefit of 0.25% as a senior citizen.
All these features and the option of availing a monthly interest payout make these FDs ideal for meeting your financial needs after retirement.
Fixed deposits have always been a popular tool among senior citizens when it comes to financial plans. However, you will have to rethink your post-retirement plans owing to the changing economic conditions and reduction of bank FD rates. You can go for corporate FDs like Bajaj Finance FDs to receive higher returns on your FDs.
Also, for growing investments and meeting financial needs in a balanced way you can split your funds in multiple fixed deposits India schemes. A 0.25% higher interest rate for senior citizens, 0.10% additional FD rate on online booking, and many other features make these FDs an ideal choice for planning your finances after retirement.
About the Author:
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory.