Sound investment planning is of utmost importance to ensure that you lead a financially secure life after retirement. To help you in saving for your retirement, the government introduces various schemes from time to time. One of this is the provident fund.
What is a provident fund (PF)?
The PF or the Employees’ Provident Fund is a mandatory retirement scheme launched by the government for the employees of the organised sector. Each month, both your employer and you contribute small portions from your salary to your EPF account throughout your working life in order to help you accumulate a lump sum on maturity. Here, interest is paid on your combined contribution. You can withdraw such funds on maturity, i.e., your retirement or other qualified instances as recognised by the EPFO.
Why should you invest your PF money?
After contributing to your EPF throughout your working life, you may now have built a substantial corpus for your retirement. Even so, instead of withdrawing the lump sum and parking it in a low-yielding savings account, investing it in lucrative options will help in growing your funds to a greater extent. Consider investing in low-risk options to safeguard your wealth.
While there are several investment options available, it is important to consider low-risk investments, especially during these volatile times. Here’s a look at some safe options to invest your money:
Post Office Monthly Income Scheme (POMIS)
Investing in Post Office Monthly Income Scheme requires an initial deposit of an amount as low as Rs. 1,500. The maximum amount that you can invest is Rs. 4.5 lakhs individually or Rs. 9 lakhs jointly with your spouse. With a lock-in period of 5 years and the current interest rate of 7.7%, you can enjoy adequate returns to meet your expenses after retirement. To continue enjoying these benefits, you can reinvest the funds for an additional duration of 5 years.
Senior Citizens Savings Scheme (SCSS)
The SCSS is a government scheme offered by banks and post offices tailored to meet the requirements of senior citizens. You can open an SCSS account by depositing a maximum amount of Rs.15 lakh individually or Rs.30 lakh jointly with your spouse. The interest rate on SCSS is altered every quarter; currently, it stands at 8.7%. Though the scheme has a tenor of 5 years, you can choose to extend it for 3 more years.
Fixed deposit (FD)
As one of the best low-risk investment options, Fixed Deposit is a must-have for investing your PF money. While FDs are offered by banks, post-offices and companies, you may consider investing in company fixed deposits offering higher yield and interest rate than others. For those looking for high returns and stability of their funds, here’s why investing in Bajaj Finance FD is the best choice:
- Safety – Bajaj Finance FD has the highest credibility ratings of FAAA by CRISIL and MAAA by ICRA, which ensure that your PF money is safe.
- High interest rate – You can start investing with a lucrative interest rate of up to 8.75% for regular investors. For senior citizens, Bajaj Finance FD rates go up to 9.10%, and an additional 0.25% on renewing your FD.
- Flexible tenors – You can also look for flexible tenors between 12 and 60 months, to grow your savings easily.
- Easy investment – You can start investing in Bajaj Finance Fixed Deposit with just Rs. 25,000 and you can easily manage your account online. With doorstep document pickup, you need not be a part of lengthy queues or multiple processes.
To suit your financial requirement post-retirement, you can choose to invest in multiple FDs offering various interest payout options. This way, you can depend on your interest earnings to finance your lifestyle.
So, invest your maturity proceeds from the PF account in one or more of the above and enjoy financial security and freedom in your golden years!