SAVING SCHEME for Senior CItizens

POST OFFICE SENIOR CITIZEN SAVING SCHEME:

This is one of the best option available for people who are above 60 years and want to invest some fixed amount for around 5 years to earn decent fixed interest.

Features:

Who can open:
People who are aged 60 or above
People who are voluantary retired and are aged above 55 years
No age limit for defense personnel.

Minimum amount to be invested : 1000
Maximum amount to be invested : 15 lakhs
Interest offered per year is 9.2 % which is added to your account on quarterly basis.At the end you will get overall interest rate of 11.5%.

Investment is eligible for tax exemption under 80C.

Amount to be invested for 5 years.It can be extended for another 3 years.

Premature withdrawl available but with some penalty
1 ½ % of the deposit as penalty if withdrawn just after 1 year
1% of the deposit as penalty if withdrawn after 2 years.

If 5 Lakhs is invested for 5 years then you can earn interest amount of 2,87,921 approximately.Please confirm at post office before opening the account.

HAPPY SAVINGS!!!!!!

Also Read
RD-For-Longterm

POMIS

Post office monthly income scheme is one of the best plan available in the segment where people want to receive regular monthly income no matter what happens.

Best suited plan for retired people or for people who don't have any kind of returns and want to have some regular kind of income to help their daily life

Features:
Interest offered : 8.4%
Maturity period - 5 years
Minimum amount to be invested: 1500
Maximum amount to be invested per single account : 4,50,000
Maximum amount to be invested per joint account  : 9,00,000

If 4,50,000 is invested, then you will get monthly income of 3150 with the current interest rate of 8.4%

If 9,00,000 is invested, then you will get monthly income of 6300 with the current interest rate of 8.4%

HAPPY SAVING!!!!!!

FD for tax saving

All salaried person will be making some investments to get the exemption of up to 1 lakh rupees under 80C.We will see how Fixed Deposit(FD) can be used effectively for that purpose.

Fixed deposit is a secured investment that can be done with any bank with a pre defined interest rate. It can be done for weeks or months or years.

But FD done for 5 years only considered for Tax exemption.

Some people who are in a hurry to make investments to save tax will be buying some tax saving mutual funds without even checking how they are performing or how they will perform. Though they get tax exemption,most of the times they lose their invested amount.

It doesn't mean that all people have lost money by investing into tax saving mutual funds. Some people have made good profit out of it. But you need to have good understanding of what that fund contain and how well it can perform in the long run.

But some people are not very enthusiastic to go for tax saving mutual funds and these can consider FD as a better option as

• ·         It will provide guarantee to your invested amount
• ·         The amount can be used for tax exemption
• ·         You get good returns based on pre defined interest rate .

The FD to be done for 5 years to get tax exemption and if we invest for the first 5 years continuously, the same amount can be used till you retire. We will see how this can be achieved

The FD that is done in 1^st year will be matured after 5 years, that is starting of 6^th year and the same amount can be used to invest into FD for 6^th year.

The FD that is done on 2^nd year will be matured after 5 years, that is starting of 7^th year and the same can be used to invest into FD for 7^th year.

The FD that is done on 3^rd year will be matured after 5 years, that is starting of 8^th year and the same can be used to invest into FD for 8^th year.

The FD that is done on 4^th year will be matured after 5 years, that is starting of 9^th year and the same can be used to invest into FD for 9^th year.

The FD that is done on 5^th year will be matured after 5 years, that is starting of 10^th year and the same can be used to invest into FD for 10^th year.

The same can be repeated till you retire.

HAPPY SAVING!!!!!!!!!

RD - Long term

RD will give better returns if it is done on continual basis for long term. Below illustration helps us to understand how RD helps in the long run

Amount	Interest rate	duration	Total amount invested	Interest amount earned	Total amount
1000	8.5	1 year	12000	563	12563
1000	8.5	2 years	24000	2229	26229
1000	8.5	3 years	36000	5094	41094
1000	8.5	4 years	48000	9264	57264
1000	8.5	5 years	60000	14852	74852
1000	8.5	10 years	120000	68836	188836
1000	8.5	15 years	180000	182410	362410

If you observe clearly

For 5 years the interest earned is 14852

For 10 years the interest earned is 68836

For 15 years the interest earned is 182410

The interest amount earned will be keep growing if your term increases. So it really fetches you very good amount at the end .This approach can be used to create retirement fund as well.

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Below illustration helps you to understand how irregular investment will NOT help you to make lump sum at the end

Amount	Interest rate	duration	Total amount invested	Interest amount earned	Total amount
1000	8.5	2 years	24000	2229	26229
1000	8.5	2 years	24000	2229	26229
1000	8.5	3 years	36000	5094	41094
1000	8.5	3 years	36000	5094	41094

Based on the above scenario, for 10 years the interest amount will be 2229+2229+5094+5094 = 14646

But if you invest continuously for 10 years the interest amount will be 68836

If you really want to create a lump sum, then you definitely have to invest regularly.

HAPPY SAVING!!!!!!!

RD

Do you keep wondering how you can save fixed small amount every month with out bothering much about any market risks?

Then Recurring Deposit(RD) is one of the better options available for you.RD allows you to save amount every month with defined interest rate that is agreed during the opening of the account.

Most of us doesn't bother much about 500/1000/2000 or even more rupees depending on the way we live.We don't even bother if that money is lying in our account or in our pocket with no spend plan.That money will somehow get spent by end of the month though no way it was planned.

If you somehow make that amount go into an RD every month then you can definitely make a good amount of sum depending on the period selected for RD.

These days most of the banks allow online transactions and if you have an online account,RD can very well be opened from your home it self.
That too if you give the bank standard instruction to deduct money every month,then you no need to worry about adding money to RD account on your own every month.

If you are earning around 25k per month and if around 2000 rupees per month are booked for RD,then you don't even feel like some amount is getting deducted every month from your account.
After few months ,you will get into a mood like the salary you get is only 23k and not 25k. The remaining 2000 will get saved every month with no hassle and will in turn create a lump sum for you in the long run.

What if some emergency happens:

This even helps you in financial emergency as you can very well close the account with minimal pre-closure charges.Instead of closing the account completely,we can go for another approach where at least we can continue doing RD.

Instead of opening one RD account with 2000 rupees per month, you can either
create two RD accounts with 1000 rupees per account per month or
create four RD accounts with 500 rupees per account per month.

With this approach,when ever any financial emergency, you can close one or two accounts depending on the required money and can keep continuing other RD accounts.This way you can meet your financial emergencies and can keep saving for future.You can even minimize pre closure penalty charges with this way.

Will discuss about how regular savings in RD in the long run can become a gold mine in my next post.

HAPPY SAVING !!!!!!

Make it a habit

Have you ever thought of saving what ever change is left over with you can become a good amount of sum.

Everyday you keep buying or spending amount on something and get change like 10,20,50 rupees and coins as well.

Get a closed box with a small hole,which cannot be opened easily.Just keep adding all the change what ever you get to that box. You can even add 100's or 500's when ever you feel it is not necessary to have that money with you.

If we store the money in easily accessible place, we tend to take when ever we need money though it's not urgent.But if we keep money in a secured box,we don't normally take it.Anyway if it is really urgent , you can very well take the money.

It is like keeping some money in your account and keeping the same in fixed deposits.

Keep adding money like that for an year or two or what ever time you like.Check the amount after that time and you yourself will be surprised to see the accumulated amount.

This method is not to get rich or not to get good returns on your money.But it is just to save some money without getting wasted and at the same time you don't feel like you are keeping aside some money from your budget for saving.

For the long run it definitely helps you to save some money and also helps you to get used to the habit of saving.

Happy saving!!!!!