Coronavirus has taken an enormous toll on financial system, impacting our lives in additional ways in which one. The central banks the world over reduce rates of interest to avoid wasting their financial system from falling into recession. The returns from bank FDs go under 7 per cent-mark.
Senior residents usually depend upon banks FDs for an everyday revenue. Amid this falling rates of interest, listed below are two enticing funding choices for individuals who are 60 or above— Senior Residents Financial savings Scheme and LIC Pradhan Mantri Vaya Vandana Yojana.
Pradhan Mantri Vaya Vandana Yojana or PMVVY scheme:
The Life Insurance coverage Company of India (LIC) has just lately modified the rates of interest of Pradhan Mantri Vaya Vandana Yojana (PMVVY). Launched in 2017, this pension scheme for senior residents will entice a hard and fast rate of interest for FY 2020-21.
Any particular person who’s 60 or above the age of 60 can avail the advantages of Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme. There isn’t a entry age.
The pension scheme has a coverage time period of 10 years and the pensioner can select month-to-month, quarterly, half yearly or yearly mode of pension. Now, the curiosity within the Pradhan Mantri Vaya Vandana Yojana (PMVVY) is increased than the fastened deposit scheme supplied by SBI. The scheme will present an assured fee of return of seven.40% every year in FY21. For these investing on this pension scheme on this monetary yr, it’s going to fetch 7.40% every year payable month-to-month curiosity for whole period of ten years.
One should buy PMVVY scheme from Life Insurance coverage Corp. of India. This pension scheme is obtainable through each offline and on-line mode.
Senior residents can draw a minimal pension of ₹1,000 monthly relying on the quantity invested within the scheme. The utmost pension quantity than will be withdrawn is ₹9,250 monthly.
One can make investments as much as ₹15 lakh on this pension scheme. The minimal funding has additionally been revised. For a pension of ₹12,000 every year, one ought to make investments at the very least ₹1,56,658. An funding of ₹1,62,162 can fetch a minimal pension quantity of ₹1000 monthly underneath the scheme, based on LIC.
Untimely give up of the PMVVY in case the investor or partner suffers from terminal sickness or vital sickness is allowed. In such circumstances, 98% of the acquisition price is paid again to the policyholders.
Senior Residents Financial savings Scheme
Touted as one of many easiest funding choices, this distinctive scheme was launched in 2004. The scheme is obtainable via a number of private and non-private sector banks and India Publish workplaces.
Any particular person who’s 60 or above the age of 60 can avail the advantages of Senior Residents Financial savings Scheme. Those that have attained the age of 55 years or extra however lower than 60 years may open their accounts underneath this scheme if they’ve opted for voluntary retirement. Defence personnel who’re above the age 50 may avail this profit.
One can open an account underneath this scheme with a minimal deposit of ₹1,000. The restrict can go as much as ₹15 lakh. The deposit within the account needs to be within the multiples of ₹1,000. Apart from the person accounts, banks additionally present the choice of opening accounts collectively with the partner underneath the Senior Residents Financial savings Scheme.
Among the many varied small financial savings scheme, Senior Residents Financial savings Scheme affords the very best fee of curiosity. Presently, the rate of interest is about at 7.4% for April to June quarter, 2020. Finance Ministry evaluate the rate of interest in each quarter. The pursuits are paid on a quarterly foundation — the primary working day of April, July, October and January.
Accounts opened underneath Senior Residents Financial savings Scheme has a tenure of 5 years. One can lengthen the account for one more three years after it matures.
In case anybody closes the account after one yr and earlier than the completion of two years, 1.5% of the deposit shall be deducted as penalty. If the account is closed after two years, 1% penalty will likely be charged.
Investments of as much as ₹1.5 lakh is eligible for deduction underneath part 80C of the Earnings Tax Act. Nonetheless, curiosity earned from the scheme is absolutely taxable. In case, the curiosity earned is greater than ₹40,000 in a monetary yr, tax deducted at supply (TDS) is relevant to the curiosity earned.
