People can’t carry on with the same investment strategy after retirement as they had at the time of full-time employment. This happens because of their old age and low regular income factors. That is why they are recommended to invest in more secure yet profitable schemes. One of the most popular plans amongst senior citizens is the PNB Housing Finance FD. Here are a few reasons why FDs are highly beneficial for the elderly.
#1 Security Of Money
Due to their limited income sources, senior citizens can’t invest in high-risk schemes like they once would have done. Therefore, the FDs are incredibly suitable for them. These plans are entirely secure, and older people can put their money into it without any worries. Along with keeping their principal amount safe, FDs also offer assured high returns on investment. Even in case of emergencies, people can take out the funds under the liquidity feature. All this shows that an FD keeps the invested amount safe and provides excellent profits on it.
#2 Higher Limits For TDS
Earlier, TDS was fixed for everyone at 10% on the interest earned through FD. This percentage increased to 20% if you didn’t provide PAN details. However, the latest IT Act reforms brought a beneficial feature for older people. Now, they don’t have to pay TDS until the interest amount crosses the limit of ₹50,000. So, even if they have higher FD interest rates, they may not need to lose any money under TDS. The TDS limit is kept much lower than this for younger people.
#3 Interest Pay-Out
Everyone knows how regular income gets affected after retirement. Hence, it becomes difficult for older people to manage their monthly expenditures. They may even need to compromise on their lifestyle in order to handle whatever income source is left with them. But the problem can get solved with PNB Housing Finance FD. It provides older adults with a benefit of interest pay-out. Under this, the investor can get their monthly or yearly earned interest as an income. The pay-out helps them in managing their monthly expenses without relying on anyone else.
#4 Higher Interest Rates
There are some specially designed FDs for retired people. These schemes offer them a higher interest rate as compared to other standard FDs. So the money won’t only remain secure but will also grow at a fast pace. You can check out your bank’s website to see whether or not you can get higher FD interest rates for retired people.
#5 Other Tax Benefits
TDS exemption isn’t the only benefit offered on FDs for older people. In the Union Budget 2018, the authorities announced an additional Sub-Section 80TTB for people above the age of 60. Under this, senior citizens can get up to ₹50,000 tax exemption for the earned interest through all kinds of bank deposits, such as FDs and savings accounts. Earlier, the maximum deduction limit was set to ₹10,000 under Section 80TTA. The same Section is still applicable to people under 60 years of age.
Now that you know how beneficial FDs are for senior citizens, don’t waste any more time and get your money deposited right away to get the best returns.