Investing as a senior citizen is difficult, but not impossible. Read this blog to find out 5 of the best investment options for senior citizens in India.
Senior citizens are known to seek safety first when investing. Needless to say, the elderly have to be more cautious when investing than those in their prime. The reason? A low risk profile and income.
After all, not everyone has the luxury of retiring with a pension. But there are relatively safe and lucrative investment options for senior citizens. You may already know this, but the actual problem is research.
Narrowing down such investment options can be difficult, especially in a noisy market. We want to help you cut through the noise. That’s why we’ve compiled a list of the best investment options for senior citizens.
Cube’s partner LiquiLoans is the world’s first-ever CRISIL rated P2P NBFC. It allows you to become a lender who loans money to top-end borrowers and earn lucrative returns of up to 9.35%.
These top-end borrowers have a credit score of 700+ on average. That’s not all. LiquiLoans is also an RBI regulated P2P NBFC, which means there are caveats to ensure your money is safe.
For example, your investment will be diversified across 150 to 250 high-end borrowers on average. If you choose a longer plan, the diversification will be higher as well.
LiquiLoans has a 100% success rate of meeting the indicated yields even during the pandemic! That’s why it makes it to our list of best investments for senior citizens.
Watch LiquiLoans’ founding member Aagam Maniar explain the asset in detail:
Cube’s partner Grip is an NBFC that allows you to become a co-investor in physical assets like equipment, furniture, cars, and more. These physical assets are leased out to creditworthy companies like:
Asset Leasing by Grip is not linked to the stock market and offers up to 12% post-tax returns. There’s more. Grip is an attractive investment for senior citizens because it generates passive income.
If you’re wondering how it’s simple. Grip disburses recurring payouts (generally monthly). These payouts can be useful for handling relatively straightforward daily expenses.
From the table above, you can see that Asset Leasing by Grip has comfortably outperformed traditional investments like bank FDs and RDs. But that’s not all.
Grip goes one step further to ensure that lucrative returns are coupled with safety by following a 3-step protocol to ensure creditworthiness.
Investing in Grip on Cube means that your investment is split across 10 unique companies from different assets, domains, and sectors. This is known to mitigate risk, which is important for senior citizens.
Watch Grip’s Founder & CEO explain everything about asset leasing:
Liquid mutual funds fall in the category of debt funds. Most liquid funds invest in relatively low-risk assets like bonds, T-bills, commercial paper, and others.
The word “liquid” implies that you can withdraw your investment with ease. Generally, liquid fund withdrawals take 1 to 2 business days (sometimes in less than 30 minutes).
This is the primary purpose of investing in liquid funds. Other reasons include the relatively safe nature of the investment and the advantage of professional management.
You might have been surprised to learn that liquid funds are known to be safer than other mutual funds. The core reason is that the assets they invest in generate fixed returns and mature in 91 days or less.
However, the returns generated by liquid funds are proportional to their safety. That’s why liquid funds are known to generate 3-6% returns on average.
This makes liquid funds an investment option for senior citizens that’s a replacement for the average bank savings account.
Regardless of the safety, you’ll still have to choose the right liquid funds to invest in. But should you pick mutual funds on your own? This video explains why it is a bad idea.
“Debt fund” is an umbrella term used to describe any mutual fund that invests in debt securities like bonds, treasury bills, commercial paper, and others. As you saw in #4, liquid funds also fall in this category.
Debt securities generate fixed returns. Their maturity may vary, ranging from 24 hours to 10 years. These two factors mean that debt funds are relatively safer than equity funds and international funds.
That’s why investors, including senior citizens, are known to invest in debt funds for short to medium-term goals. There are other reasons as well like professional management and relatively low volatility.
Not to forget, debt funds have historically outperformed bank FDs, a favourite investment option for senior citizens that’s slowly losing its attractiveness.
How can senior citizens get handpicked mutual funds? Watch this video to know more.
Senior Citizens Savings Scheme (SCSS) was introduced for those who are above 60 years of age. The goal of SCSS is to provide regular pensions to senior citizens with an interest rate of 7.4% per annum.
But SCSS is prone to interest rate revisions. Not so long ago, the interest rate on SCSS was as high as 8.7% but was recently reduced to 7.4%. Furthermore, SCSS carries a lock-in of 5 years.
That said, SCSS carries a very low risk that makes it a top investment option for senior citizens. What you should also know is that the maximum investment amount for SCSS is ₹15 lakhs.
Does SCSS count as one of the best ways to invest money? Watch this video to find out.
Not all senior citizens have the comfort of a pension or consistent source of income. That’s why the assets the elderly invest in should have the right mix of safety and solid returns. Thus, the top 5 best investments for senior citizens are Loans via Merchants by LiquiLoans; Asset Leasing by Grip; Liquid Funds; Debt Funds; and SCSS.
The safest investments for senior citizens include Loans via Merchants by LiquiLoans, Asset Leasing by Grip, Senior Citizens Savings Scheme (SCSS), Debt Funds, and Bank Fixed Deposits. That said, a senior citizen must always consult a trained financial professional before investing in any asset.
The non-traditional schemes that give the highest interest rates (between 6-12% on average) for senior citizens include Loans via Merchants by LiquiLoans, Asset Leasing by Grip, and Debt Funds. Traditional assets like the Senior Citizens Savings Scheme (SCSS) and Senior Citizen FDs are also known to provide decent returns (3-7.4%).
Note: Facts & figures are true as of 20-04-2022. None of the information shared here is to be construed as investment advice. Exercise caution when investing in assets like stocks, mutual funds, alternative investments, and others.
on stock picking, poring over excel sheets, financial news, analyzing market trends, tracking the Sensex, researching company fundamentals, comparing mutual funds, reading financial reports, trying to predict the future & losing your sanity!