Shield Yourself Against Lower Deposit Rates

Investing in some of the below options will help you lock-in your interest rate in the present downcycle

Falling interest rates on bank savings/ fixed deposits have affected everyone, but senior citizen have been hit the most, as many elderly investors park their savings in the bank savings account/ fixed deposits (FDs) where, they earn interest periodically that helps meet their day-to-day expenses. As interest rates — both on savings accounts and FDs — have been coming down for some time consistently, they have been receiving lower in-hand money over the years with having to meet the increased costs of day to day needs.

As ability to take risk comes down substantially for them post retirement and with a shorter time horizon to invest, they cannot risk the money by investing in equity as an asset class, which helps you guards you against inflation and earn better returns. In this article, I will discuss some of the products/investment avenues, which can help shield you against lower deposit rates.

Pradhan Mantri Vaya Vandana Yojana

One can invest in this scheme until May 3, 2018. Under this scheme, which is managed by the Life Insurance Corporation of India (LIC), you get a guaranteed annuity in the form of periodical payments @ 8% (pension) for 10 years. The scheme can be purchased online as well as offline by any individual above 60 years but not a Hindu Undivided Family (HUF). The ceiling for the maximum pension, which a family can earn, is capped at Rs 5,000 per month and accordingly the money one can invest is also calculated.