Overview
If you too have elders in the family or in the neighbourhood, you must read the following article. It talks about various financial services provided by the government to elders and encourages them to do financial management.
Senior citizen saving scheme: This senior citizen scheme is valid for all elders above the age of 60. Under this scheme, elders can deposit money in their bank with a minimum amount of Rs. 1000/- which may go up to Rs. 15Lakhs. The interest for the first 3 months is 8.6% and is reviewed by the government in every quarter. The elders will not have to pay any taxes for this scheme. It can be availed from a private or government bank.
Pradhan Mantri Vaya Vandana Yojana: This senior citizen scheme for elders is managed by the Life Insurance Corporation of India (LIC). One can only subscribe to this scheme by March 2020. As per the scheme, one can earn interest of 8% on the deposit of a minimum amount of Rs. 1000/- up to 15Lakhs. The duration of the return is 10 years. Also, one has to pay taxes for the same.
Varishta Pension Bima Yojana: Similar to the previous senior citizen scheme, this scheme is also launched by LIC and offers similar benefits of 8% interest on the deposited amount for 10 years. The additional benefits are that one isn’t required to go through a medical check-up, no need to pay tax, you can opt to pay out monthly, quarterly, half-yearly and annually. However, the scheme has a lock of 15 years.
Rashtriya Vayoshri Yojana (RVY): This senior citizen scheme was launched in 2017 by the Ministry of Social Justice and Empowerment of Government of India. Senior citizens who are below the poverty line and are cardholders will get benefit of this scheme. If the beneficiary is suffering from low vision, loss of teeth, impaired hearing, and are disabled will be provided with devices to ensure assisted-living.
Such financial services and senior citizen schemes mentioned above are a great way to achieve financial management.
Check the current figures
Interest rates, deposit limits and tax rules for schemes for senior citizens change from time to time. The scheme names above are a good starting list, but confirm the present terms at the post office, bank or the official government website, and ask a qualified adviser before investing.
What to do next
1. Write down income and spending for a month: pension, interest, rent and regular costs. 2. Keep an emergency fund in an easy-access account for medical needs. 3. Check health insurance and what it covers, and renew it on time. 4. Choose safer instruments first for money that must last, such as government-backed savings schemes and bank deposits, and avoid schemes promising very high returns. 5. Add nominees to all accounts and policies, and keep a will up to date; see legal basics: wills and power of attorney. 6. Share a list of accounts with a trusted person. 7. Keep a small monthly allowance your parent controls, so they stay independent.
Avoid common traps
Beware of calls offering returns that sound too good to be true, "lottery" prizes, KYC updates by phone or pressure to invest in a hurry. See preventing scams and doorstep fraud and managing a parent's money safely.
When to ask a professional
Use a registered investment adviser or chartered accountant for tax and investment decisions, and a lawyer for wills and powers of attorney. Our care advisors can help families think about care costs.
About our care services
To know more about these and other such financial services for senior citizens, contact Emoha, your one-stop solution for all the needs of an elder.
Equipment mentioned in this guide
Frequently asked questions
Which savings options suit senior citizens?
Government-backed schemes and bank deposits are common for safety. A registered adviser can suggest a mix for your situation.
How much should an older person keep for emergencies?
Enough to cover several months of expenses and a medical cushion, as an adviser suggests.
How can I protect a parent from financial fraud?
Teach them never to share OTPs or PINs, set transaction alerts and agree a rule to check large payments with family.
Should my parent give signing power to a child?
Only through a proper legal document such as a power of attorney, with advice.
Sources and further reading
- Ministry of Finance, India, information on small savings schemes for senior citizens
- Reserve Bank of India, financial awareness material for senior citizens
- Securities and Exchange Board of India, investor education material
Tags: retirement financesenior citizen savingsfinancial planningmoney safetyLifestyle and wellbeingEmergency pendantSafety and alert devicesHealthy ageingElder care
This article is for general education and is not medical advice. Speak to your doctor before changing your exercise, diet or medicines.
