How to Invest Smartly for a Comfortable Retirement

Your retirement is a reflection of how well you have planned and saved/ invested for it. All this is to be done in advance, i.e while you are still young and earning. With so many options – some good, some not so good to choose from, individuals planning for their retirement are highly likely to find it difficult to make a choice for themselves.

So, here is a guide to help you decide which investment/savings instrument to go for:

National Savings Certificate

Popularly known as NSC, these are government savings bonds that have tenures of the range of 5 years or 10 years. NSC are considered favorable as small savings and for the income tax benefits they provide. Section 80C of the Income Tax Act provides tax benefits.


Banks are known to provide loans against the deposit which acts as the security.

Senior Citizens Saving Schemes

As is clear from the name, this investment option is meant exclusively for senior citizen investors. In these schemes, individuals aged between 55 years and 60 years, who have opted for voluntary retirement are eligible to open an account, but within 30 days of receiving retirement benefits. The tenure is of 5 years and on maturity, it can be extended by 3 years.


Returns are of the range of 8.4% and payable 4 times in a year and are taxable. Having said that, they are still considered to be one of the best fixed income instruments after considering post tax returns.

Fixed Deposits

Fixed deposits are provided by banks and Non-Banking Financial Companies (NBFCs) and provide returns of the range of 7% to more than 8%, depending on the age of the investor, the financial institution chosen and the tenure of investment. Senior citizen investors earn 0.25% to 0.50% more than regular customers. For longer tenures of investment, the interest rate offered is higher than shorter tenures.


Post Office Monthly Income Scheme

The Post Office Monthly Income Scheme is a great way to generate regular, monthly income after retirement, with an interest rate of 7.5% per year that gets credited each month into your account. Similar to the previous investment option, the interest income of this five-year scheme is taxable. You can open an account by investing a maximum of Rs 4.5 lakhs at any post office and later get it transferred to a different post office according to your convenience.



These are some of the safest investment options for retirement . You can choose one or more of these to create the right mix of options and build  a strong portfolio that yields the best returns for your retirement.

Tips and Tricks: How to Make your Fixed Deposit Yield More Returns


Arbitrage Mutual Funds Vs Fixed Deposit: Which is Better?

To understand which out of arbitrage mutual fund and fixed deposit is better, you need to understand both of them properly. Starting with FDs, fixed deposit is the safest investment tool in India. You invest your money with any Bank or financial institution for a fixed tenor, you get interested accordingly after the maturity of your investment. The risk involved is less because the money keeps on rotating from investors to banks and then to borrowers. At present, an FD generates an average of 6-7% of interest per annum.


Now, coming back to arbitrage funds, arbitrage funds are equity-based mutual funds that leverage the price difference in the cash and derivatives market. In simple words, you buy an asset, add up your profit and sell it in a different market simultaneously to gain the profit. Let’s say you buy a high-priced asset worth Rs 1000, divide it or sell it as one to someone else at Rs 1500. You are instantly pocketing a profit of Rs 500. That is one way to understand how arbitrage mutual funds work.

Now, which is better- Fixed Deposit or Arbitrage Mutual Fund? To know the answer, you should know the pros and cons of both.


  • Fixed deposit is not linked to equity or the stock market, thus it is safe and guarantees a fixed amount of return. However, when it comes to arbitrage mutual funds, the risk involved is less but not equal to fixed deposit. Considering all the mutual fund schemes, the risk involved is relatively the lowest in arbitrage mutual funds.

  • Now, considering the return on investment: the return on investment is on the same principal amount is the lower with arbitrage mutual funds as compared to fixed deposit.

  • Tax exemptions: According to the new budget, if you are a senior citizen, you can earn up to Rs 50,000 income as returns without any tax deductions. The same tax-exemption limit is Rs 10,000 in case of adults. On the other hand, if you are investing in arbitrage mutual funds, your income might be taxable depending on the investment tenor.

Bottom line: Gaining profits from Arbitrage mutual funds is all about your luck, your investment strategy, and the share market. Whereas, Fixed deposit investment is sure shot to garner returns.

Fixed Deposits Versus Recurring Deposits– Why Fixed Deposits Win

Creating Emergency Fund for Retirement.

This segment will describe the all the ways which help you to make emergency fund for retirement.


  • Invest in Multiple FD


No matter how less you earn, creating an emergency fund when you’re on the younger side of the timeline turns out fruitful in the long run. Now, you can invest in multiple savings schemes- half of them to act as a pension plan, and one or two specifically as an emergency fund.


The second option is, you can try cumulative FD’s and start a new FD as EMERGENCY fund using the regular interest payment.


  • Invest for a Long Term


Any investment with a longer maturity period garners more interest as compared to short-term investments. So, let us say you invest a sum of Rs 1 lakh for a period of 15 years, at an interest rate of 6.5% p.a you get Rs 263048 (Applicable tax deduction is not included).



  • Invest in Market-Based Investment Scheme


A well-planned investment in market-based investment scheme like mutual fund can fit the bill. However, just make sure to be patient with your investment and allow it time to grow.    


  • PPF


Public provident fund scheme is offered by the public sector banks and the Indian post office. The deposit can be made in lump-sum or 12 equal installments.


Due to the lock-in period of 15 years, PPF can act as a great emergency fund.

Know about How to Increase the FD Returns?

Find out Some Useful Facts about FDs.

FDs are accounts where people invest money by simply making a deposit for a fixed tenure and gain an interest on top of it provided by the Financial Institution. The good part about FDs is that they are not affected by market ups and downs. That means that your returns are assured, irrespective of market fluctuations. So before investing you need to check interest calculation on FD.

Now let us explore the vital terms attached to FDs:

  • The FD Interest Rate: It is this interest which various Banking institutions provide. Because of that people invest their money in such deposits. The higher the interest more the gains. Please note that FDs are both cumulative and non-cumulative types.


  • The Tenure: It is the time period for which you are locking your money in an FD. The higher the tenure more interest you are going to gain. The gains are directly proportionate to the tenure.
  • The Maturity of your FD: Your FD is said to be matured when the tenure ends. After the maturity of your FD you can get the returns credited to your account and if you want you can reinvest the amount.  


You can calculate the returns on your FD by the help of an Online FD calculator. Particularly if you want to see beforehand how much you are gaining on your investment.

Therefore, if you want assured returns then you must check on the interest rate. You should go for the highest interest rate possible for maximum gains.