Which is better SCSS or mutual fund?
Mutual Fund investments are subject to market risks. Whereas, SCSS provides guaranteed returns and peace of mind to senior citizens, which is more important in life after retirement from a regular job. The maximum investment limit in SCSS was Rs 15 lakh five years back.
SCSS scheme provides guaranteed quarterly interest along with tax deduction benefits under Section 80C to senior citizens to support their post-retirement lives. In contrast, retirement mutual funds can be used to accumulate a corpus during working years to support your post-retirement life.
Mutual fund for senior citizens is suitable for those who are in their 60s. Even if you are in your 30s, you can plan your retirement for yourself or your parents If you want to live a comfortable life post-retirement. You can opt for investing in SWP (Systematic withdrawal plan) if you want to earn regular income.
The scheme doesn't provide options for regular adjustment of income based on inflation or cost of living increases. Withdrawals before the scheme's maturity come with penalties, reducing the overall return. SCSS pays interest quarterly, without an option to reinvest the interest for compound growth.
The Centre has recently revised the interest rates applicable to small savings schemes for the quarter of January-March 2024. Though it didn't revise the interest rates for Senior Citizens Savings Scheme, the government-back scheme offers one of the best competitive rates to Indian residents aged above 60 years.
ETFs can be more tax-efficient than actively managed funds due to their lower turnover and fewer transactions that produce capital gains. ETFs are bought and sold on an exchange throughout the day while mutual funds can be bought or sold only once a day at the latest closing price.
And, in general, ETFs tend to be more tax efficient than index mutual funds. You want niche exposure. Specific ETFs focused on particular industries or commodities can give you exposure to market niches.
Disadvantages include high fees, tax inefficiency, poor trade execution, and the potential for management abuses.
| ICICI Bank | Union Bank of India | State Bank of India |
|---|---|---|
| Bank of Baroda | Canara Bank | UCO Bank |
| Indian Bank | Central Bank of India | IDBI Bank |
| Punjab National Bank | Bank of India | Bank of Maharashtra |
Indeed, a good mix of equities (yes, even at age 70), bonds and cash can help you achieve long-term success, pros say. One rough rule of thumb is that the percentage of your money invested in stocks should equal 110 minus your age, which in your case would be 40%. The rest should be in bonds and cash.
Can I invest 30 lakhs in SCSS?
Budget 2023 Latest Update: The maximum deposit for senior citizen saving scheme has been increased from Rs 15 lakhs to Rs 30 lakhs. The Senior Citizens Savings Scheme (SCSS) is primarily for the senior citizens of India.
The SCSS has a fixed tenure of five years, after which the deposited money is returned to the investor. If desired, the account holder could extend the same account for an additional three years.
Improved Developer Experience: Compared to Plain CSS, SCSS offers a more effective development experience. Variables, nesting, mixins, and function features all serve to cut down on duplication, encourage code reuse, and improve readability.
For individuals nearing or in retirement, investments such as bonds, annuities, and income-producing equities can offer additional retirement income beyond Social Security, a pension, savings and other investments.
Ideally, you'll choose a mix of stocks, bonds, and cash investments that will work together to generate a steady stream of retirement income and future growth—all while helping to preserve your money.
- ICICI Prudential Balanced Fund - Started over 10 years ago, this is a balanced and hybrid fund, featuring more investment in debt than in equity. ...
- SBI Bluechip Fund - There is no need to run when you hear the word “blue-chip”, as you may think this is an equity-oriented fund.
| Ticker | Name | 5-year return (%) |
|---|---|---|
| PBFDX | Payson Total Return | 16.58% |
| CFGRX | Commerce Growth | 16.48% |
| SSAQX | State Street US Core Equity Fund | 16.45% |
| BUFEX | Buffalo Large Cap | 16.16% |
A mutual fund is an investment in a selection of securities like stocks and bonds. Their returns fluctuate with the markets but there are many choices that aim to minimize the risk of losses. In general, CDs are safer than mutual funds, but mutual funds have the potential for significantly higher returns.
Equity mutual funds are the best option for long term investment. Based on your risk-taking capacity, investment can be made in other sub-categories within equity mutual funds, such as large cap funds, mid-cap funds, and small-cap funds.
High fees and expenses
Mutual funds in Canada are notorious for their layers of fees, such as management fees, administrative costs, and others that can significantly reduce your investment returns over time.
Should I invest in mutual funds when market is up?
What is the best time to invest in Mutual Funds? There is no rule of thumb or fixed criteria to state the best time for investing in mutual funds. While a bear market may look like an ideal time to invest in mutual funds, the identification of a bear market entirely depends on the expertise of the fund manager.
There's definitely nothing wrong with buying mutual funds for your 401(k). But if you only stick to mutual funds, you might end up with a lower balance heading into retirement due to losing a lot of money to fees. Rather than resign yourself to that, consider a mix of mutual funds and index funds.
All investments carry some degree of risk and can lose value if the overall market declines or, in the case of individual stocks, the company folds. Still, mutual funds are generally considered safer than stocks because they are inherently diversified, which helps mitigate the risk and volatility in your portfolio.
You must strive to save at least 30% of your gross income or ₹60,000 every month. To calculate how much amount you should invest in SIPs, we will have to use the standard formula, which is 100 minus your age to be invested in equity through mutual funds.
If you need your money in two years and the market drops, you may have to take that money out at a loss. Generally speaking, mutual funds — especially equity mutual funds — should be considered a long-term investment.
