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Q. I am a retired senior citizen, aged 71. Along with my wife, I have invested about 50% of my retirement corpus in leading public sector banks’ and NBFCs’ deposits. The balance is distributed across SCSS, LIC Vaya Vandana Yojana, PPF, RBI 7.75% taxable bonds. Some bank and NBFC FDs worth ₹30 lakh will be maturing shortly. The new interest rates are very low. Kindly advise any other secure investment option available for regular income with better returns as we are dependent on our interest income.
Rajesh
A. The ultra-low interest rates in the economy have allowed lenders to raise deposits at very low rates that don’t really compensate for inflation. We do think that the abnormally low interest rates will improve once economic growth normalises.
Founder - Ladder7 Financial Advisories, Contributor Content
Solution: The govt can help needy seniors with clear targeting. An extra 1% pa in specific schemes can be given to those who are not covered by pensions and do not have taxable incomes.
2020 will go down as a turning point in human history. Many of us have faced health scares, income disruption, economic uncertainties, debt security default worries in this period. Also, during this period, interest rates have been coming down as the government wanted to hold down the rates and make it easier for businesses to borrow and stay afloat.
But there has been collateral damages due to this move. Those dependent on the interest from their investments have been affected as they find that they get much less for their investment now. They have understood the perils of reinvestment risk now! This is compounded by the fact that inflation has been higher than the tolerance limits set by the Reserve Bank of India (RBI), which is up to 6%