Accounts payable

My PPF account has reached maturity. How to Get Regular Income at a Higher Rate Compared to Bank Fds

The PPF stories of myself (73) and my wife (67) have matured recently. We were both in private jobs. Therefore, no monthly pension is received. We have interest income from bank DFs. Please advise where we can safely invest the proceeds of this PPF maturity so that we can earn monthly/quarterly interest at better rates compared to FD bank rates which are maximum 6% from now on without any risk to the capital.

It has really become very difficult for seniors to survive in the era of low interest rates, especially when they have no opportunity to supplement their interest income. In my opinion, you have the following three options to invest your matured PPF account amount giving you better returns and that without any risk to capital.

First, you can both invest individually in the Senior Citizen Saving Scheme (SCSS). Interest on SCSS is payable quarterly. Currently, the interest rate is 7.4% per annum Although the interest rate for SCSS is announced quarterly by the government, the interest rate is fixed for the entire 5-year term at the rate applicable to the time of deposit. You can make one or more deposits under SCSS but at no time can the total deposits of all accounts opened under SCSS exceed the threshold of fifteen lakh rupees. If you wish, you can extend the term for two more years when it expires.

Secondly, in addition to 15 lakhs each in SCSS, you can also invest Rs. 15 lakhs individually in Pradhan Mantri Vay Vandana Yojna (PMVVY). This is an annuity plan with refund of premium. This scheme is managed by Life Insurance Corporation of India for the government. Currently in PMVVY you also get 7.4% return per year for ten years of his tenure. You have the option of opting for monthly, quarterly, semi-annual and annual payment options and the actual return will change accordingly.

The balance amount you can invest in Reserve Bank of India Floating Rate Savings Bonds. The interest rate payable on these bonds, unlike SCSS and PMVVY, is floating and changes every six months. The interest payable on these bonds is indexed to the interest payable on the national savings certificate and is 0.35% higher. Currently, the interest rate payable on these bonds is 7.15% per annum. Interest on these bonds is paid on June 30 and December 31 of each year. These bonds have a duration of seven years. One can invest any amount in these bonds without there being an upper monetary limit.

Balwant Jain is a tax and investment expert and can be reached on [email protected] and @jainbalwant on Twitter

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