Interest rates are facing a downward spiral, which is worrying those dependent on them to no end. A 25 basis point reduction by the Reserve Bank of India (RBI) has not helped matters. Bank interest rates are now hovering between six-seven per cent for different tenures. This has meant that over the past two-three years, their income has slid by 20-30 per cent. While inflation has moderated, various costs have scaled impressive peaks, which leaves little cheer for those dependent on income from fixed deposits (FDs).
What can these people do? Are there any alternatives available to them?
Senior citizens can invest in the Senior Citizens’ Savings Scheme (SCSS) for a tenure of five years, which can be extended by three years. At an interest rate of 8.3 per cent, currently, this looks attractive. It offers a quarterly interest that ensures regular income. However, there is a limit of Rs 15 lakh that a senior citizen can invest. Hence, the scheme is of limited utility.
