Is it enough to invest in Pension Plans?

By Ritu Sharma on Feb 18, 2019

Savings for retirement has now almost become like a mandatory rule for a financially secure life after retirement. But saving alone is not sufficient to meet the needs of retirement years. If you are someone who has kept your wishes to be fulfilled after you get free from your obligations, you would probably need a higher sum value. This is when investment is required.

Investing your saved money that is idle will help you grow your savings with the principle of compounding. A predetermined rate of interest is added to your invested sum on a monthly, quarterly, half-yearly, or yearly basis. After a fixed tenor, your invested amount will be returned to you along with the added interest rate.

Many investment options specifically focus on building retirement corpus such as Provident Fund (PF), Fixed Deposit (FD), etc. You need to choose your investment Plan for retirees based on the risk associated with it, interest rate, and the guarantee of the return from the investments.

Is Investing in Pension Plans Worth?

A pension plan will require you to contribute a set amount on a monthly basis while you are earning. If you are working with an organization with more than 20 employees, you would need to pay a portion of your salary every month for the Employee Provision Fund (EPF). Your employer will give an equal contribution and deposit the sum into your EPF account.

Once you retire or leave your job, the accrued amount is paid to you along with a fixed interest rate.

Pension plans have its share of pros and cons. You need to check the details of your pension plans to know the benefits and features of the plan. Also, you need to check if the sum you would receive would be sufficient for your retirement years and read the complete terms and conditions of the policy.

If your employer provides you the facility to invest in pension plans, you can grow your investments using Senior Citizen Pension Plans. However, if you need a private pension plan, you can go for investments offering a secure and highest interest rate like Fixed Deposit.

Why Should You Invest in FD?

Prominent financial providers in India like Bajaj Finance offers assured returns for your investment with high FD interest rates of up to 9.10 %. You can calculate the FD interest rates and the maturity amount from your investment using the quickly accessible online FD calculator.

Even though you invest in pension plans, setting aside a portion of your saving for FD can act as your financial backup to meet your financial requirements. Also, you can ladder your investments in FD with multiple FDs at the same time with different tenors to maintain liquidity from your investments.

Following are some of the features of availing FD from Bajaj Finance:

● Deposit sum as low as Rs 25000

● Guaranteed high returns without market rate influence

● 0.35% increase in Senior Citizen Fixed Deposit Interest Rates

● High stability with CRISIL’s FAAA and ICRA’s MAAA credit rating

● Flexibility in choosing FD tenor from 12 months to 60 months

● You can select the type of FD from cumulative and non-cumulative FD. Cumulative FD pays the interest along with the maturity amount or annually. Non-Cumulative FD allows you to choose the frequency of interest payout from monthly, quarterly, half-yearly, and yearly basis.

● In case of emergencies, you can make a partial withdrawal. However, you will need to pay a penalty charge, and you will not be able to enjoy the comprehensive benefits of the FD account.

● You can avail loan against your FD account wherein you can use up to 90% of the accrued sum.

● You can avail deduction under Section 80C of the Indian Income Tax Act.

Pension plans would help you meet your daily requirements, but an FD will help you complete your unfulfilled dreams. Make your life after retirement smooth by investing in FD with Bajaj Finance!