InvestorQ : I want to gift my father an investment plan for his olden days on this Father's Day, can anyone suggest?
Sam Eswaran made post

I want to gift my father an investment plan for his olden days on this Father's Day, can anyone suggest?

Neha Samdani answered.
2 years ago

Well, I see this as a great idea to enrich your father's wallet. The best thing about this idea is that you don't have to make a hole in his wallet and set him financially free. This year, Father’s Day falls on June 21st, which means you don't have much time to find dad a gift he would love. No worries, I have penned down some ideas to help you!

Note- Pick schemes to cater to your father's needs also make sure of his retirement or retired life by considering to build a retirement portfolio with a mix of fixed income and market-linked investments. 

Here are a few ideas that are safe and can fetch good returns over the maturity period:

1. Senior Citizens Savings Scheme (SCSS):

Specially designed for retirees, if you pick for early retirees (under VRS) or senior citizens (above 60 years of age). The current interest rate under the scheme is 8.6% per annum, payable quarterly. For this scheme, you can reach out to any post office or bank. The maturity of the scheme is five years which can be extended by 3 years once the maturity is attained. You can also take a tax deduction facility under section 80C of the Income-tax Act.

2. PM Vyay Vandana Yojana (PMVVY):

If your dad falls under the age of senior citizen then you can choose this scheme till March 32, 2023. LIC (Life Insurance Corporation) offers this scheme with a maturity period of 10 years at an assured interest rate of 7.40% per annum. Get guaranteed payout of pension for a period of 10 years at a pre-decided rate.

3. Post Office Monthly Income Scheme Account (POMIS):

Post Office of India offers a 5-year investment plan with interest rate of 7.8% per annum, payable monthly, and is variable. The maximum investment cap is Rs. 9 lakh. I do not recommend this scheme to those who are looking to save tax because interest is taxable here and does not qualify for any deduction under the income-tax act.

4. National Pension Scheme:

Most well-known investment plan to save tax and retirement benefits to all citizens, even from the unorganized sector. Contributions made to the scheme are accumulated until retirement and the growth of the corpus continues through market-linked returns. Subscribers also have an option to exit the scheme before retirement.

5. MF Portfolio:

Lastly, you can choose to gift a Mutual Fund portfolio if his age falls under 40-50 years because investor can stay invested for a period of 10+ years until retirement. Mutual funds invest in various securities and are considered to be a safe investment option. You can a portfolio for your father’s long-term goals. If he still has few years to retirement you can choose a mix of debt and equity, as equity will be helpful in the long-term growth of the corpus and debt will provide some fixed income.

Explore more such other options available that are safe and provide good returns such as Fixed deposits with banks, investment in tax-free bonds and immediate annuities.