Planning For Retirement Using A Fixed Deposit Scheme
Planning for retirement can be a big thing. You don’t have a job to sustain your monthly expenses anymore, which means you’ll have to live off your savings or through your investments. When that happens, it can be a little overwhelming to think about how you’re going to manage.
But luckily, there’s always a way, and one of these ways are fixed deposits.
If you plan them right, the FD interest rate you get on your investments can be more than enough to keep you comfortable during your retirement. Here’s how you go about it.
A Higher Interest Rate For Senior Citizens
As a senior citizen, you get a few more benefits than regular customers when you choose to invest in fixed deposits.
For one thing, you can get a higher fixed deposit interest rate than other people would, meaning that there’s a lot more money to be gained if you open a fixed deposit as a senior citizen.
As usual, you can keep the fixed deposits for a variety of term periods, from a period of months to as long as ten years. This helps you tremendously, if you’re someone who chooses to diversify their investments by putting small amounts of money into a variety of lock-in periods.
Higher Tax Exemption Limits
As a regular customer, a fixed deposit becomes fully taxable once it reaches the 10,000 rupees limit. That is, if your fixed deposit starts to earn more than 10,000 rupees a year, then your income through that can and will be taxed through TDS (Tax Deducted at Source).
But the cap is a little higher for a senior citizen, meaning that they can earn up to 20,000 rupees a year through a fixed deposit before it actually becomes a taxable source of income. This gives people looking to retire a lot more freedom, since they can invest higher amounts into a fixed deposit without having to worry about whether or not they have a taxable source of income.
This is a primary method of fixed deposit tax saving, since you won’t actually have to pay anything until you exceed the threshold. These kinds of fixed deposit tax benefits can help retirees, since they have a limited amount of income coming in, and they have to plan their expenses.
No Penalty for Premature Breakage
Another thing that benefits retirees when they’re investing in fixed deposits is that most banks don’t charge a penalty if they want to break their deposit prematurely. This means that, in case of emergencies, they can actually break one of their investments to get that much needed cash without having to worry about any premature breakage fees. If you have an urgent medical or financial expense to take care of and need cash urgently, you can break your fixed deposit without any negative backlash on you. Contact your bank to see if this applies to you.
Retirement is a time to relax and enjoy the fruits of your labours. You’ve been working for decades and it’s only right that you should be able to enjoy what you’ve earned. With fixed deposit schemes for retirees, there’s no longer a reason to worry about any financial issues for your old age. Take a look at various banks and what kind of fixed deposit schemes they offer, and see which one suits you best.
Always remember to diversify your investments, since if one fails, you can always have another to fall back on and not worry about any lost money.