How to maximise your PF money after retirement
As a retiree, having sufficient funds for monthly expenses is key
When retiring and withdrawing your Employee Provident Fund, you may be tempted to splurge on a much-needed vacation or indulge in extravagance. However, a wiser approach would be to look for a financial instrument that enables you to grow the value of your PF earnings and retirement savings.
As a retiree, having sufficient funds for monthly expenses is key. While you can stash away your PF corpus in a savings account for liquidity, this approach greatly limits your interest gains. Also, the fear of outliving your retirement savings, amid increasing inflation rates and falling interest rates, may add to your post-retirement fears.
In order to enable you to multiply your savings smartly, here are a few options to help you build your PF corpus post-retirement.
Senior citizen FD
For those looking to reap the benefits of stable returns, safety of deposit and monthly earnings, Fixed Deposits are a great investment option. Recently, the Monetary Policy Committee of RBI announced Long-Term REPO Operations (LTRO), to facilitate easier access to credit. However, this has pushed banks to reduce deposit rates, which has led to falling interest rates. However, NBFCs on the other hand, are offering attractive interest rates, which can help senior citizens gain from higher liquidity and convenience.
Hence, you can choose to invest in company FDs like Bajaj Finance Fixed Deposit, and gain from stable returns, periodic interest payouts, safety of your deposit amount, auto-renewal, multi-deposit and loan against FD facility.
To understand this better, consider a scenario where a senior citizen deposits an amount of Rs. 30 lakh for a tenor of 60 months. Check the table below to find out how your interest payout and interest rates vary, as per the interest payout frequency you choose.
| Investment amount | Tenor (in months) | Payout frequency | Applicable interest rate | Interest payout |
| Rs.30 lakh | 60 | Monthly | 8.05% | Rs.20,125 |
| Rs.30 lakh | 60 | Quarterly | 8.10% | Rs.60,750 |
| Rs.30 lakh | 60 | Half Yearly | 8.18% | Rs.1,22,700 |
| Rs.30 lakh | 60 | Yearly | 8.35% | Rs.2,50,500 |
All the above-mentioned results were generated using the FD calculator.
Bajaj Finance also offers the Systematic Deposit Plan feature that allows you to make bite-sized monthly deposits as low as Rs.5,000 per month.
Multiply your earnings through Senior Citizen Savings Scheme
This government-backed savings scheme is offered only to individuals over the age of 60. Here, you can make a maximum deposit of Rs 15 lakh and the amount you invest is locked-in for 5 years at the stipulated interest rate for the given quarter.
Currently, the SCSS interest rate is 8.60% and this rate is reviewed quarterly by the Ministry of Finance. This option is great for wealth generation; however, the lengthy lock-in period and premature withdrawal penalties, 1-1.5% of the SCSS deposit,can be a demotivating factor.
Play the financial market with National Pension Scheme
If you’ve got some investing experience and aren’t risk-averse, you can consider growing your PF corpus through National Pension Scheme. Here, investments are made into either debt or equity bonds, with a maximum exposure to equities of 75%. Further, you can opt for this scheme up till the age of 65, following which it can be further extended up to the age of 70.
Another pointer to note with NPS is that you can decide on your involvement with the investment. You can choose to be ‘Active’ and decide the type of split and scheme to be invested in or you can choose ‘Auto’ and allow investments to be made based on your age for optimal returns.
While all the above-mentioned options are viable for your PF corpus post-retirement, you must bear in mind that at this stage in life liquidity is key and so, a senior citizens FD is a safe bet. This is especially so when you opt for industry-leading offerings like the Bajaj Finance Fixed Deposit. Here, you access to FD interest rates up to 8.35% and what’s more, the Bajaj Finance boasts of approximately 80,000 senior citizen investors with book size amounting to around Rs.8,000 crore.
This alongside the high stability ratings it carries, ICRA’s MAAA and CRISIL’s FAAA, indicates that it is a reliable instrument and a great medium for wealth generation for all its 2.2 lakh FD investors.To begin the journey of enhancing your EPF, start your application for the Bajaj Finance Online FD today!