6 Best Investment Plan for Retirement in 2022

Updated onJanuary 22, 2022

Best Investment Plan for Retirement

Let’s take a look at Six such best investment plan in India for retirement that find a perfect balance between risk and return. Retirement in the normal sense is when a person no longer needs to work from his/her active working life. After retirement, investment becomes one of the most important parts to live a smooth and easy life. Building a retirement portfolio with a combination of consistent income and market-related investments remains a major challenge for many retirees.

BANK FIXED DEPOSIT (FD)

Fixed Deposit or FD is an investment instrument offered by various bank and non-banking financial institutions. An investor can deposit a fixed amount with a predetermined interest for a certain period of time. Fixed deposits always offer guaranteed returns. When you open a FD it remains constant till its maturity. If the rate of interest fall or rises, it does not affect the investment rate. It is a hassle-free investment.

Tenure: 7 days to 10 years.
Rate of Interest: depends on tenure and bank.
Limit: There is no limit of amount
Tax: If your interest earn from fd more than 40000/- in a financial year then TDS will be deducted.
Facility: Senior citizen ( above 60 years) interest more than 50000/- in a financial year then TDS will be applicable.
Loan: Customer can pledge for loan against FD.
Risk: Low-Risk Investment.

BANK AND THEIR OFFERED FD INTEREST ( 7 DAYS TO 10 YEARS)

BANK	GENERAL	SENIOR CITIZEN
SBI	2.90% TO 5.40%	3.40% TO 6.20%
HDFC	2.50% TO 5.50%	3.00% TO 6.25%
AXIS	2.50% TO 5.75%	2.50% TO 6.50%
BANK OF BARODA	2.80% TO 5.25%	3.30% TO 6.25%
PNB	2.90% TO 5.25%	3.50% TO 5.75%

PUBLIC PROVIDENT FUND (PPF)

PPF is one of the best investment PPF is a retirement savings scheme offered by the Government of India. It offers a guaranteed return. Only Indian residents can open PPF account. The main purpose of PPF scheme is to make people invest with a small amount of money and provide more returns savings. The PPF system offers good returns with an attractive interest rate and tax benefits which is not required to pay on returns that generate from interest rates.

Rate of Interest: current rate of interest is 7.1% ( announce quarterly).
Limit: Minimum Rs. 500 to maximum Rs. 150000 in a financial year.
Tax: Though it is tax saving fund but more than Rs. 150000 in a financial year is tax payable.
Tenure: 15 years.
Loan: Pledge for loan with some conditions.
Where to open account: Post Office of selected banks.
Risk: Low-Risk Investment.

SENIOR CITIZEN SAVINGS PLAN

A senior citizen has various options of investment to choose but it may vary for every individual. The main purpose of launching Senior Citizens Savings Scheme (SCSS) that aim to offer senior citizens a constant regular income after they attain 60 years of age. Senior Citizens Savings Scheme offers safety in investments and provides tax benefits.

Senior citizen savings scheme (SCSS):

Features

Backed by: Government of India.
Entry age: 60 years and above.
Tenure: 5 years ( extended 3 years).
Rate of Interest: 7.4% per annum.
Minimum investment: Rs. 1000.
Maximum investment: Rs. 15 lakh.
Tax: Interest more than 50000 in a financial year tax payable.
Where to open: Post office or selected bank.
Risk: Low Risk Investment.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

Government of India has various types of schemes for senior citizens with the age of 60 years or more can invest in PMVVY and SCSS schemes. Pradhan Mantri Vaya Vandana Yojana (PMVVY) offers low risk with guaranteed return with tenure for 10 years. In case of SCSS, money gets blocked for 5 years.

Features

Backed by: Government of India.
Operated by: Life Insurance Corporation of India.
Entry age: above 60 years.
Minimum Investment: 1.5 lakh.
Maximum Investment: 15 lakh.
Rate of Interest: 7.40% p.a
Frequency of return : monthly, quarterly or yearly.
Tax: The interest return is taxable.
Tenure: 10 years.
Risk: Low Risk Investment.

Post Office Monthly Income Scheme (MIS)

This is a monthly guaranteed return scheme

Features

Backed by: Government of India.
Rate of interest: 6.6% p.a ( payable monthly).
Minimum investment: Rs. 1000.
Maximum: 4.5 lakh for single and 9 lakh for joint account.
Tax: Interest is taxable.
Risk: Low Risk Investment.

NATIONAL PENSION SCHEME(NPS)

It is Government-sponsored pension scheme any Indian ( resident or non-resident) age between 18 to 65 can join in this scheme. It is open to all employees of Governments or Public sectors. It is a low-risk equity fund.

Under NPS there are two types of account

Tier- I ( default)

Minimum investment in tier –I is Rs. 1000 and there is no maximum limit, withdrawal not permitted in this scheme.

Tier- ii (voluntary)

Minimum investment in tier- II is Rs.250 and there is no maximum limit, withdrawal permitted in this section of scheme.

Top performing NPS

NAME	Return in 5 yrs
HDFC PENSION MANAGEMENT COMPANY LIMITED SCHEME E – TIER II	17.40%
ICICI PRUDENTIAL PENSION FUND SCHEME E – TIER II	16.70%
KOTAK PENSION FUND SCHEME E – TIER I	16.80%
UTI RETIREMENT SOLUTIONS SCHEME E – TIER II	16.60%
SBI PENSION FUND SCHEME E – TIER I	15.80%

NSC

NSC is another Post Office-based fixed-income investment scheme that offers steady returns and is a safe form of investment with tax benefits. NSC is a low risk guaranteed return scheme of central government.

Features

Backed by: Government of India.
Where to open: Post Office.
Tenure: 5 years.
Minimum amount: Rs. 1000.
Maximum amount: Rs. 20000 ( in a single book).
Rate of Interest: 6.8% p.a.
Loan: Bank accepts NSC as security of granting loan.

How to open fixed deposits(FD) account offline?

1) Visit to your desired bank.
2) Open an account along with the KYC documents.
3) Request for FD along with desired amount of money.
4) You may add nominees to your account.

Disclaimer
All the information are used for education purpose only. Investing in financial intruments poses a risk of financial losses. Investors must therefore exercise due caution. InvestoAxis is not liable or responsible for any losses caused as a result of decisions based on the article.