When it comes to retirement saving, senior citizens should choose fixed income investments, which provide a constant source of income while posing less risk than stocks and mutual funds. As a consequence, for older folks, a fixed deposit (FD) strategy, which provides a fixed income, might be a solid option, but the only risk is inflation risk. The annual inflation rate in India jumped to 7.79 per cent in April 2022, and considering senior citizens’ risk tolerance capacity in mind, here are four safe fixed income investments that would provide inflation-beating returns of above 8% for them.
Transport Development Finance Corporation Ltd. (TDFC)
Because the Tamil Nadu Transport Development Finance Corporation Ltd. (TDFC) is a non-banking financial company owned entirely by the Tamil Nadu government, there is no risk concerning deposits or returns. This NBFC has two fixed deposit options: one is the Periodic Interest Payment Scheme (PIPS), in which interest is paid monthly, quarterly, or annually, and the other is the Monthly Multiplier Scheme (MMS), in which the interest rate is compounded quarterly and paid along with the principal amount at maturity. The corporation gives an interest rate of 8.25 per cent on deposits of 36 to 48 months under the MMS programme, and a maximum rate of 8.50 per cent on deposits of 60 months to elderly persons. Senior citizens can receive an annual rate of 8.51 per cent on deposits of 36 to 48 months and 8.77 per cent on deposits of 60 months under the PIPS plan.
Periodic Interest Payment Scheme (PIPS) Interest Rate
Monthly Multiplier Scheme (MMS) Interest Rate
Tamil Nadu Power Finance and Infrastructure Development Corporation Limited (TNPFC)
TNPFC (Tamil Nadu Power Finance and Infrastructure Development Corporation Limited) is another NBFC owned entirely by the Tamil Nadu government. The firm offers two types of fixed deposit options: non-cumulative fixed deposit, where interest is paid monthly, quarterly, or yearly, and cumulative fixed deposit, where interest is compounded quarterly and paid on maturity. Senior citizens can get a maximum rate of 8.50 per cent on deposits of 60 months with a non-cumulative fixed deposit that comes with a maturity tenor of 2, 3, 4 or 5 years. Senior citizens will receive 0.5 per cent additional interest on cumulative fixed deposits of 1, 2, 3, 4, and 5 years. Senior citizens can earn a maximum rate of 8.50 per cent on 60-month deposits.
Non-cumulative FD Interest Rate
Cumulative FD Interest Rate
Shriram Transport Finance RD
Shriram Transport Finance’s recurring deposit has been rated “FAAA/Stable” by CRISIL, indicating the best possible safety in terms of both term deposit and return, as well as “MAA+/with Stable Outlook” by ICRA, indicating the highest credit quality. This RD has a maturity period ranging from 12 to 60 months, and one can begin investing with a minimum investment of ₹500 per installment. There is no additional interest rate benefit for senior citizens, however, the company gives both normal customers and senior citizens above 8% inflation-beating returns on deposits of 36 months to 60 months.
North East Small Finance Bank RD
North East Small Finance Bank (SFB) has been insured under Deposit Insurance and Credit Guarantee Corporation (DICGC) regulated by the Reserve Bank of India. The DICGC covers principal and interest on savings, fixed, current, recurring, and other deposits maintained with any commercial or cooperative bank up to a limit of ₹five lakhs. North East Small Finance Bank recently amended its interest rates on April 1, 2022, and as a result of the modification, the bank is currently offering senior citizens a maximum rate of 8% on RDs maturing in two years. This is now the only bank in the country that gives an RD return of 8%, which beats inflation.