Investment is a major consideration while doing financial planning across every age group in life. You should begin investments early on in life to ensure you do not face any financial difficulties in your later years. Different investment plans are preferred by different kinds of investors.
Some investors prefer to invest in equity funds which offer high returns but are also extremely risky, owing to their dependence on market conditions. Meanwhile, other investors prefer low-risk government security bonds which ensure steady returns over the investment term.
Age also has a considerable role to play in investors deciding which instruments to invest in. For instance, younger members of the population would consider investing in high-risk market-linked equity funds because they have fewer responsibilities and can afford the risk.
However, the older a person gets, their responsibilities increase and they might want to invest in less risky instruments since they can’t afford to lose money.
For investors who plan ahead, there are several investment options available that help them save up for their retirement years and ensure a comfortable standard of living. With the Invest4G Plan, available on Canara HSBC Life Insurance, investors can start saving up from the time they are 28 years old and ensure a secure retirement period. The Invest4G Plan is a Unit Linked Insurance Plan (ULIP) which lets you invest your funds while also securing yourself with adequate life insurance coverage.
Aside from this, there are several tax savings schemes that are available only for senior citizens to invest in in India. Read on to learn more about these.
One of the most popular investment instruments among senior citizens who are looking to save taxes while also gaining returns on their investments, the SCSS is specially created for Indian citizens above the age of 60 years. The accounts under this scheme can be opened at any post office or bank that deals in the product, and the maximum amount that has to be deposited is Rs. 15 lakh. While the tenure period is typically for 5 years, it can be extended up to an additional 3 years once the scheme hits maturity. Tax benefits on this investment are available under Section 80C of the Income Tax Act, 1961. The tax however, does not cover the interest earned on the investment and that is charged as per the applicable tax slab.
NSC is another investment instrument that has gained immense popularity among senior citizens who are looking to invest in tax-savings investments. The NSC is another fixed income investment instrument available at post offices, and which can be invested in by anybody. It is relatively low risk and the investment tenure extends up to 5 years. Compounded annually, the interest is accumulated and handed to the investor along with the principal amount, on which there is no cap, at the time of the fund’s maturity. Tax benefits are available under Section 80C of the Income Tax Act, with deductions available every single year when the interest amount is reinvested into the scheme. The only taxable component under this scheme is the final pay-out.
Bank fixed deposits are secure investment instruments that are popular among investors looking to make low-risk instruments while also earning steady returns. Fixed deposits can be made across different banks, which also offer higher rates of interest on these investments for senior citizens as compared to other investors. Under Section 80C of the Income Tax Act, bank fixed deposits with a 5-year tenure are eligible for tax benefits. While interest income earned from fixed deposits, interest income earned up to Rs. 50,000 is tax exempt for only senior citizens.
Insurance always forms a major part of everybody’s investment plan, owing to the multifaceted benefits it offers to policyholders. Health insurance is one of the most required types of insurance, as it can significantly reduce the medical bills incurred at the time of illness. What makes insurance even more popular is the tax benefits available on the premiums paid towards health insurance. Even the Invest4G Plan, available from Canara HSBC Life Insurance, can help you save taxes while also investing towards coverage for your life and earning returns on your investment funds.
There are several tax savings schemes available for senior citizens, but it is necessary to pick the best scheme in accordance with your individual requirements. Depending on whether or not you require a fixed tenure for the investment, and how much risk you are willing to take, you can prepare your customised investment plan.