My wife would be turning 63 this December. She has a fixed deposit of Rs 5 lakh maturing at the same time. In which of the following options should I invest for higher returns? I want to use this money for daily expenses.
1) UTI MIP Advantage (Growth) and subsequently opt for an SWP after three years,
2) NPS
3) Senior Citizen Saving Scheme
- Rakesh
NPS is ruled out. At the age of 63, you can invest only for two years and it will be a forced withdrawal after that. Also, if you opt for Tier 1, it is mandatory to buy an annuity with at least 40 per cent of the corpus at the age of 65. A fund which allocates 15-20 per cent in equity should give you decent returns. However, the Monthly Income Plan by UTI is not a very good scheme in this category. But you are absolutely right in planning for a Systematic Withdrawal Plan (SWP) to withdraw money after three years. You should invest in Senior Citizen Saving Scheme only if you are looking for a guaranteed income. Since you don't plan to use this money immediately, I would advise you to invest in growth option of a good monthly income plan. Don't withdraw more than six per cent in a year at the time of withdrawal otherwise you will end up eating your capital. You may also opt for a plan with a slightly higher exposure towards equity if you don't intend to use this money for the next three to four years.