Retirement Planning for Senior Citizens| RetyrSmart



Post Office Saving Schemes can still make sense depending on your risk profile
financialexpress.com

Post Office Saving Schemes can still make sense depending on your risk profile

As post office saving schemes are issued and managed by the Government of India, the amount invested and returns generated are backed by sovereign guarantee.

Post office saving schemes carry the least risk among all investment options.

Looking for risk-free investment avenues which are ideal for tax saving too? Post office saving schemes such as PPF, NSC, Senior Citizen Savings Scheme, Post Office Fixed Deposit and Kisan Vikas Patra are some of such options which you may consider. In fact, in these uncertain times when hardly anything is certain and getting fixed returns on investments seems to have become a thing of the past, post office saving schemes are good for generating wealth, although returns from them may not meet your expectations.

"Post office saving schemes carry the least risk among all investment options. As these saving schemes are issued and managed by the Government of India, the amount invested and returns generated are backed by sovereign guarantee. Their interest rates are subject to quarterly review, depending on the yields of the 10-year government bond yield," says Naveen Kukreja, CEO & Co-founder, Paisabazaar.com.

There is, thus, no doubt that if you are looking for risk-free investments, then these schemes score high. In fact, they are great for tax-saving as well. However, they may not necessarily be the best choice if you are looking to build wealth over a short to medium tenure.

"Thus, they are good options for long-term investments and for senior citizens who have additional disposable income, but do not know where to invest it. However, those who are looking to break these in emergencies and want liquid options should look at alternatives as these are tenure-locked and cannot be withdrawn before time. Even if some of them can be broken early, you will not get the interest benefit,” says Adhil Shetty, CEO, Bankbazaar.com.

Here's a look at some of the top post office saving schemes and their current interest rates

Post Office Savings Schemes

Rate of Interest

Liquidity

PO Savings A/c

4% p.a.

No restrictions on withdrawals

5-Year Post Office Recurring Deposit

6.9%

Premature closure permissible after 3 years.

Post Office Fixed Deposit

6.6-7.4%

Premature closure permissible after 6 months

Post Office Monthly Income Scheme

7.3% p.a.

Maturity period of 5 years. Premature closure permissible after 1 year

Senior Citizen Savings Scheme

8.3%

Maturity period of 5 years. Premature closure allowed after 1 year on payment of penalty

Public Provident Fund

7.6%

Lock-in period of 15 years. Premature closure is not allowed. Partial withdrawal is allowed from 7th year of account opening.

National Savings Certificate

7.6%

Maturity period of 5 years. Premature closure or partial withdrawal is not allowed

Kisan Vikas Patra

7.3%

Maturity period of 9 years and 10 months based on current interest rate. Lock-in period of 2.5 years

Sukanya Samridhi Account

8.1%

Account can be closed after the attainment of 21 years of age by the girl child. Partial withdrawal is allowed for education and marriage expenses after the girl child attains the age of 18 years.


Thus, depending upon your requirement, you can select the schemes which are suitable for your financial goals. However, if you are looking for returns in double digits and are also willing to take some risk, then you will have to look beyond such schemes