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4 Risk free fixed income investments for senior citizens
1) Transport Development Finance Corporation Ltd. (TDFC)
As because the Tamil Nadu Transport Development Finance Corporation Ltd. (TDFC) is a non-banking financial company owned entirely by the Tamil Nadu government, there is no risk concerning deposits or returns.
This NBFC has two fixed deposit options: First one is the Periodic Interest Payment Scheme (PIPS), in which interest is paid monthly, quarterly, or annually. And the second one is the Monthly Multiplier Scheme (MMS), in which the interest rate is compounded quarterly and paid along with the principal amount at maturity.
The corporation gives a fixed interest rate of 8.25% on deposits for the period of 36 to 48 months under the MMS programme. And the maximum rate of 8.50% on deposits for the period of 60 months to elderly persons. Under the PIPS plan, Senior citizens can receive an annual rate of 8.51% on deposits for the period of 36 to 48 months and 8.77 per cent on deposits for the period of 60 months.
2) Tamil Nadu Power Finance and Infrastructure Development Corporation Limited (TNPFC)
TNPFC (Tamil Nadu Power Finance and Infrastructure Development Corporation Limited) is another NBFC owned by the Tamil Nadu government. The corporation offers two types of fixed deposit options: one is a non-cumulative fixed deposit, where interest is paid monthly, quarterly, or yearly, and another is cumulative fixed deposit, where interest is compounded quarterly and paid on maturity.
Senior citizens can get a maximum rate of 8.50% on deposits of 60 months with a non-cumulative fixed deposit that comes with a maturity tenor of 2-5 years. On cumulative fixed deposits, senior citizens will receive 0.5 per cent additional interest of 1-5 years. Senior citizens can earn a maximum rate of 8.50 per cent on 60-month deposits.
3) Shriram Transport Finance RD
Shriram Transport Finance‘s recurring deposit has been rated “FAAA/Stable” by CRISIL, which indicating the best possible safety in terms of both term deposit and return, and also “MAA+/with Stable Outlook” by ICRA, which indicating the highest credit quality.
This RD has a maturity period ranging from 1 to 5 years, and one can begin investing with a minimum investment of ₹500 per installment. There is no benefit of additional interest rate for senior citizens, however, the company gives both normal customers and senior citizens above 8% inflation-beating returns on deposits of 3 years to 5 years.
4) North East Small Finance Bank RD
North East Small Finance Bank (SFB) has been insured under Deposit Insurance and Credit Guarantee Corporation (DICGC) regulated by the Reserve Bank of India (RBI). The DICGC provides principal and interest on savings, fixed, current, recurring, and other deposits maintained with any commercial or cooperative bank up to a limit of ₹5 lakhs.
North East Small Finance Bank recently amended its interest rates on April 1, 2022. As a result of the modification, the bank is currently offering to senior citizens a maximum rate of 8% on RDs maturing in two years. This is currently the only bank in the country that gives an RD return of 8%, which can beats the inflation rate.
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