Retired individuals have less inclination for risky assets like equities and real estate and would like steady income to take care of their needs. Here are a few safe fixed deposits/bond ideas for retired individuals, which offer high safety with superior yields.
High rates of as much as 11%
Company fixed deposits are not secure deposits and hence individuals run the risk of witnessing a default in principal and interest payment. However, there is no such worry with KTDFC as it is a government of Kerala undertaking and to that extent relatively safe. Retired folk who are Senior Citizens can avail an interest of as much as 10.75% on a three year deposit. If you deposit above Rs 25 lakhs and are a senior citizen you would get an interest rate of 11%.
High pre-tax yields of 12.52%
The REC Tax Free Bonds are currently open for subscription. If a retired individual is in the highest tax bracket (30.9% tax rate), his pre-tax yield on the REC bonds works out to 11.96%, 12.64% and 12.52% for 10 years, 15 years and 20 years, respectively. If you are in the 20% tax bracket, your effective yield by way of interest on the bonds works out to 9.9% for 10 years, 10.45% for the 15 year bond and 10.33% for the 20 year bond.
Senior citizens can get as much as 10%
If your preference is towards bank deposits, then Andhra Bank has an attractive offer. Andhra Bank is offering an interest rate of 9.50% on deposits ranging from 1-2 years. The amount is for under 15 lakhs and senior citizens would be entitled to 0.50% more, taking their rates to 10%
Strong pedigree with high safety
Mahindra Finance is offering an interest rate of 10% for a three year deposit. Senior citizens would be entitled to an extra 0.25%. Mahindra Finance is a part of the Mahindra Group and the fixed deposit has a Crisil rating of 'FAAA', which indicates a high level of safety.
High on safety
The HDFC Platinum Fixed deposit with a tenure of 15 months attracts an interest rate of 9.75%. One of the oldest financial institutions in the country HDFC deposits have a rating of FAAA by Crisil, indicating very high safety.