Retirement means you no longer have a regular income source. Planning your finances beforehand is crucial for living a smooth life after retirement. A Fixed Deposit is a reliable savings instrument to live a smooth life after retirement.
Are you wondering why you should invest your funds in a Fixed Deposit account? Jump into this article to figure out how a Fixed Deposit will support your income after your retirement.
1. Higher Interest Rates for Senior Citizens
Compared to regular investors, senior citizens can enjoy a higher interest rate from Fixed Deposits. For instance, AU Small Finance Bank offers up to 0.75% higher Fixed Deposit interest rate for senior citizens.
While applying for an FD, you can also choose the auto-renewal option. It will ensure that your funds get re-invested. Therefore, your funds will continue to multiply.
2. Meet Recurring and Non-Recurring Expenses
As a retiree, you can have other goals to accomplish in addition to covering your everyday expenses. You might want to give your kids a piece of property, host a wedding, go on your dream vacation, pay off your mortgage early, and more. You can ladder your FDs over a specific period to conveniently cover each need. By doing this, you will always have money available to meet your requirements as they arise.
AU Small Finance Bank lets you choose tenures ranging from seven days to ten years. If you want a high interest rate on FD, you should choose a longer tenure. Moreover, you can choose from different payout options like monthly and quarterly, to meet your financial needs.
You can choose the monthly payout option to meet your recurring expenses. For non-recurring expenses, you can choose a Fixed Deposit investment payable at maturity.
3. Avail an Overdraft Against Fixed Deposit
You never know when you can come across a financial emergency in life. After retirement, financial emergencies often arise in the form of medical expenses. Anyone can opt for a commercial loan against a Fixed Deposit to meet their financial needs during an emergency.
While premature withdrawals are eligible from a Fixed Deposit account, taking a loan seems more prudent. It will ensure that you are not breaking your investment and continuing to earn interest on it till maturity. Moreover, you will also be saved from bearing a penalty fee on premature withdrawals.
4. Get Guaranteed Returns
Guaranteed returns are one of the major benefits of Fixed Deposits after retirement. Unlike other forms of investments, Fixed Deposits are not influenced by market fluctuations. The interest earned on Fixed Deposits remains the same throughout the tenure. You can leverage a Fixed Deposit interest calculator to determine your returns before beginning to invest.
5. Easy to Invest and Monitor
Unlike other forms of investments, you will be able to invest in Fixed Deposits in a simple and hassle-free way. You can make a Fixed Deposit online by filling out an application and submitting minimal documents. Alternatively, you will be able to visit the nearest bank branch to open your Fixed Deposit.
Monitoring your Fixed Deposit is also an extremely simple affair. Since the interest rate remains fixed throughout the tenure, you won’t have to keep track of its performance. Instead, you will only have to keep an eye out for the fund to mature.
Wrapping up
If you are looking forward to investing in a high interest Fixed Deposit, choose AU Small Finance Bank to have a steady income source after retirement. You can make a Fixed Deposit with a tenure of 7 days to 10 years, according to your choice. Moreover, the process of creating an AU Small Finance Bank Fixed Deposit account is also simple.
You can create an online FD via video banking, net banking, or their app. If you aren’t comfortable with the online method, you can visit the nearest branch to open your Fixed Deposit account. Go ahead and open your FD for a stress-free life after retirement.
FAQs:
1. What types of Fixed Deposits are good for tax saving?
If tax exemption is your primary concern, you can invest in the five-year tax-saving Fixed Deposit schemes offered by AU Small Finance Bank. This Fixed Deposit can offer tax deductions of up to Rs 1.5 lakhs.
2. What are the tax benefits available to senior citizens on FD interest?
Interest income generated from Fixed Deposits is taxable. When the interest income on FDs crosses Rs 40,000, it is subjected to a 10% TDS. But for senior citizens, the tax exemption limit is up to Rs 50,000.
3. What is the minimum amount that you need to open an FD account?
You will need to deposit a minimum of Rs 1000 to open an FD account. However, there is no upper limit on your Fixed Deposit account.
4. Why is a Fixed Deposit best for retirement planning?
A corporate fd account is the best for retirement planning because of its guaranteed returns. Despite market fluctuations, a Fixed Deposit will keep offering the same returns throughout the year.
5. What is a Fixed Deposit interest calculator?
A Fixed Deposit interest calculator is useful for determining your returns. You will have to enter your deposit amount, interest rate, and tenure, and the tool will display your returns instantly.
