Are FDs the Best Investment Tool for Senior Citizens?
Usually, senior citizens need to invest to achieve financial independence. They often look for products that have minimal or no risk. This is one of the reasons for the popularity of fixed deposits(FDs) for people in the age group of 60 and above.
Investing in FDs offers security and an assured return on your investments, which is important to ensure financial stability. Other investment options like mutual funds are subject to market conditions and the returns are affected by any fluctuations.
You can include other investments within your portfolio; however, it is recommended to invest in FDs for guaranteed returns. Here are five reasons to invest in FDs if you are a senior citizen:
- Higher rate of interest
The FD interest rates vary among financial institutions and depend on the investment tenure. However, most institutions provide a higher fixed deposit interest rate for senior citizens as compared to regular investors. Therefore, you can earn higher returns on your investments.
- Meet regular expenses
You can choose to withdraw the interest at periodic intervals. This can help you to meet your day-to-day household expenses or fulfill other financial responsibilities.
- Secure returns
Another big plus point of investing in this investment avenue is the stable FD rate, which provides a steady income stream. The interest rate is not affected by any market movements. So, you earn sure-shot returns.
- Minimum principal requirement
You can open a Fixed Deposit with a small principal amount. Generally, the minimum investment amount is INR 5,000, which means that you do not need a huge corpus to start the FD.
- Premature withdrawal and loan
In case you have an emergency fund requirement, you can close the FD before its due date. Several institutions allow you to partially withdraw the amount to meet urgent monetary needs. Most financial institutions permit you to take a loan against the FD at a competitive rate of interest. As a senior citizen, you may find it difficult to qualify for other types of loans in case you require monetary assistance.
Contrary to perception, the FD eligibility norms and application process are not cumbersome. You can easily open an FD online and manage the account from the comfort of your home without needing to visit the issuer’s branch office.
Mahindra Finance offers an attractive FD interest rate to senior citizens. You can visit its official websiteto know about the fixed deposit eligibility criteria and open an account instantly.
