Retirement Corpus of 27 lacs

[jay_ccjunkie_21]

My father has just retired with a corpus of close to 27 lacs INR.
Need some suggestions of investment which can generate regular returns as well as some moderate risk investments.
Any suggestions?

 

[gurubhai]

My father has just retired with a corpus of close to 27 lacs INR.
Need some suggestions of investment which can generate regular returns as well as some moderate risk investments.
Any suggestions?

After retirement, equity investments are generally not recommended.
IMO FDs look best options as indexation benefits have been removed from Debt funds and FD interests are very good right now.
Can do multiple FDs and 1-2 FD in Small finance bank(which are backed by RBI).
Don't invest more that 4L in these small finance bank if you choose to open as total 5L is insured by RBI.
.
also he can opt for monthly/quarterly payouts from all/some FDs as per his requirements.
.
Also if possible it's a suggestion to do rolling FDs, like 4L for 1 yr, another 4L for 2yr, and another 4L for 3yrs.. something like that. so that after every year you have some cash and freedom to use it or reinvest in FD again as per situation.

 

[jay_ccjunkie_21]

Thank you for your reply. Is Investment in post office schemes worth? I have came across an option where for Senior Citizen interest rate is close to 8% per annum. Is it a viable option?

 

[gurubhai]

Thank you for your reply. Is Investment in post office schemes worth? I have came across an option where for Senior Citizen interest rate is close to 8% per annum. Is it a viable option?

I have heard of them but can't comment as I don't know much about them. Even FDs in small finance bank is giving that much interest.
You need to be aware of locking period of such instruments and decide for your own.
For NSC, lockin period is 5 years and it is tax exempted under 80c. If you father still has taxable income, you may consider.
.
I feel don't put everything in one basket and you will be fine.
PS everyone should also keep some emergency fund as cash as well.

 

[Walter White]

Thank you for your reply. Is Investment in post office schemes worth? I have came across an option where for Senior Citizen interest rate is close to 8% per annum. Is it a viable option?

The schemes are reliable. The only issue is that Post office employees are worse than public sector bank employees. 🙄

 

[gowthamv]

(My suggestion is purely based on safety and assured returns only.)

Put around 60% of the money in Fixed Deposit of Small Finance Banks. Myself using Ujjivan SFB and the experience has been smooth.
Don't put all in one SFB. (RBI insures upto 5 Lakh for deposits in each SFB)

4L-Ujjivan SFB
4L-Jana SFB
4L-Equitas SFB
4L-AU SFB

Keep around 5L in any Savings Account as an emergency fund.

For the rest of the amount, you should decide if you need assured returns with low risk or better returns with high risk.

 

[BVCBVC is verified member.]

You might consider even IDFC bank also. This bank has good potential in future also.

Tenure	FD rates for Non-Senior Citizens	FD rates for Senior Citizens
7 – 14 days	3.50%	4.00%
15 – 29 days	3.50%	4.00%
30 – 45 days	4.00%	4.50%
46 – 90 days	4.50%	5.00%
91 – 180 days	5.00%	5.50%
181 days – 366 days	6.75%	7.25%
367 days – 18 months (367 days to 548 days)	7.25%	7.75%
18 months - 1 day - 3years (549 days to 3 years)	7.75%	8.25%
3 years – 1 day- 5 years	7.00%	7.50%
5 years- 1 day – 10 years	7.00%	7.50%

 

[Dragon_slayer]

Put everything into FD and choose the monthly interest payout option. You will get your regular income that way.

 

[thanix]

My father has just retired with a corpus of close to 27 lacs INR.
Need some suggestions of investment which can generate regular returns as well as some moderate risk investments.
Any suggestions?

Please decide how much you want to allocate in different investments - low and medium risk. Generally thumb rule is equity/mutual fund is 100-age but varies for each person.

Check Senior citizens savings scheme for one part. It can be opened in banks too.

Senior Citizen Savings Scheme (SCSS) - Interest Rate 2023, Tax Benefits, Eligibility, Rules and Opening SCSS Account

Senior Citizen Savings Scheme (SCSS) - Interest Rate 2023, Tax Benefits, Eligibility, Rules, Investment Amount and How To Open the SCSS Account - All you need to know. Senior Citizens Savings Scheme (SCSS) is primarily for senior citizens of India that offers regular income.

cleartax.in

Interest rate is getting reset each quarter and currently at 8.2 with 5 year lockin.

As others told, currently it is the best time for FDs to lock in money as senior citizens easily get 7.5,% interest in any banks.

If you want to slightly take risk, consider scheme like tamilnadu power finance corporation like FDs. Though it is not in excellent health, it is backed by TN government. You can deposit online too.

Alternately, check government bond rates which are now fetching FD rate equivalents for less than a year if you want liquidity too

For moderate risk, consider mutual funds with large caps and low exit load or index funds for short term for an year (at least till next elections). Decide to exit or continue after that period.

 

[jay_ccjunkie_21]

Thank you for all the valuable inputs guys. Decided to park 25% of money in SFB FD's. 25% in SCSS with 8.2% interest rate. Still thinking on allocating the rest of money.

 

[kjs]

(My suggestion is purely based on safety and assured returns only.)

Put around 60% of the money in Fixed Deposit of Small Finance Banks. Myself using Ujjivan SFB and the experience has been smooth.
Don't put all in one SFB. (RBI insures upto 5 Lakh for deposits in each SFB)

4L-Ujjivan SFB
4L-Jana SFB
4L-Equitas SFB
4L-AU SFB

Keep around 5L in any Savings Account as an emergency fund.

For the rest of the amount, you should decide if you need assured returns with low risk or better returns with high risk.

How is the app experience of Ujivan SFB. I m planning to open SFB account. Shortlisted 2 equitas and Ujjivan based on FD returns and some better popularity compared to JANA, Fincare etc. Is it mandatory to have physical debit card for above banks ?

 

[COSMOCRAT]

Thank you for all the valuable inputs guys. Decided to park 25% of money in SFB FD's. 25% in SCSS with 8.2% interest rate. Still thinking on allocating the rest of money.

Google about FD laddering.

 

[devine_mortal]

This confusion is very obvious. I'm too planning on getting a steady income by investing a larger amount and it is no easy task. In my case, I've decided to keep invested in a PMS and withdraw whenever necessary. Working so far but will move onto a fixed return investments once comfortable with the planning.

 

[srikant]

Assuming Senior Citizen: Equitas gives 9% for 444 days.

Utkarsh gives 9.1% for 2-3 years.

Suryoday gives 9%+ I think too.

I think it is better to put at least some amount in 3 years' deposit, as it is possible interest rates will come down.

If you choose interest payout, I think you can even put 5L in each SFB with zero risk. Note that this is a very, very low risk - so don't be terrified to exceed this 5L.