As of today the FD or Fixed Deposit for Senior Citizens is giving around 7.75% to 8% interest rates which is quite good. I have also given some money to my parents to keep in the FD because the interest they get is tax free and it is good for me.
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Now people might argue that the real inflation is 6% to 8% and getting 8% is the loss. Now the thing is for the senior citizens it's not above creating the wealth anymore for them. It's about surviving for their day to day expense. I also sent money to my parents but if someone is not getting it for them best option is to get the monthly income from their debt instruments. And the FD is the best.
For Senior Citizens it's not about creating the wealth but keeping it intact and the FD is the best way to do it. But again they have to divide their money in different bank accounts, different instruments like FD in bank and post office and some government schemes. In that way they will be sure that their money is insured. In FD upto 5 lakhs is insured even if the bank goes down and that's why I say this is the best option.
For us the salaried class, FD is the worst option because you have to pay income tax on the interests you get and after that it doesn't beat the inflation. And Aldo when you are still working the main focus is to not get the regular income but you should be compounding it to create the wealth. And after the retirement use that wealth to create the regular income and that's where yhe FD can help you.
I am saying it is good option now because the interest rates have gone up from 5% to around 8% which is quite great and you can keep that interest rate for 10 years if you invest it in FD for 10 years which is the maximum tenure.
