When it comes to retirement savings, seniors should choose fixed-income investments, which provide a steady source of income while carrying less risk than stocks and mutual funds. Therefore, for seniors, a fixed deposit (FD) strategy, which provides fixed income, might be a solid option, but the only risk is inflation risk. India’s annual inflation rate jumped to 7.79% in April 2022, and given the risk tolerance capacity of older people, here are four safe fixed income investments that would provide them with returns above 8% vs. inflation.
Transportation Development Finance Corporation Ltd. (TDFC)
Since the Tamil Nadu Transport Development Finance Corporation Ltd. (TDFC) is a non-bank financial company wholly owned by the Government of Tamil Nadu, there is no risk regarding deposits or returns. This NBFC offers two fixed deposit options: one is the Periodic Interest Payment System (PIPS), in which interest is paid monthly, quarterly or annually, and the other is the Monthly Multiplier System (MMS), in which the interest rate is compounded. quarterly and paid with the capital at maturity. The company provides an interest rate of 8.25% on deposits of 36 to 48 months under the MMS program, and a maximum rate of 8.50% on deposits of 60 months to seniors. Senior citizens can benefit from an annual rate of 8.51% on deposits of 36 to 48 months and 8.77% on deposits of 60 months under the PIPS plan.
Periodic Interest Payment System (PIPS) Interest Rates
Monthly Multiplier Scheme (MMS) Interest Rates
Tamil Nadu Power Finance and Infrastructure Development Corporation Limited (TNPFC)
TNPFC (Tamil Nadu Power Finance and Infrastructure Development Corporation Limited) is another NBFC wholly owned by the government of Tamil Nadu. The company offers two types of fixed deposit options: non-cumulative fixed deposit, where interest is paid monthly, quarterly or annually, and cumulative fixed deposit, where interest is compounded quarterly and paid at maturity. Seniors can benefit from a maximum rate of 8.50% on 60 month deposits with a non-cumulative fixed deposit with a maturity of 2, 3, 4 or 5 years. Seniors will receive an additional 0.5% interest on cumulative fixed deposits of 1, 2, 3, 4 and 5 years. Seniors can earn a maximum rate of 8.50% on 60 month deposits.
Non-cumulative FD interest rate
Cumulative FD interest rate
Shriram Transport Finance R&D
Shriram Transport Finance’s recurring deposit has been rated “FAAA/Stable” by CRISIL, indicating the best possible security in terms of term deposit and yield, as well as “MAA+/with stable outlook” by ICRA, indicating the quality highest credit. This RD has a maturity period ranging from 12 to 60 months, and one can start investing with a minimum investment of ₹500 per slice. There is no additional interest rate benefit for seniors, however, the company offers regular and senior customers returns above 8% against inflation on 36 month deposits at 60 months.
Small Finance Bank of the North East RD
The North East Small Finance Bank (SFB) is insured by the Deposit Insurance and Credit Guarantee Corporation (DIGCC) regulated by the Reserve Bank of India. The DICGC covers principal and interest on savings, fixed, current, recurrent and other deposits held with any commercial or cooperative bank up to a limit of ₹five lakhs. The North East Small Finance Bank recently changed its interest rates on April 1, 2022, and as a result of this change, the bank is currently offering senior citizens a maximum rate of 8% on RDs maturing in two years. It is now the only bank in the country that gives an RD yield of 8%, which beats inflation.