Page 28 - Banking Finance July 2024

ARTICLE

Scheme by nature.NPS has several Fund Managers with B. Liquid fund for sudden exigency,
delivery of returns ranging from 9% to 12% and is better C. Dividend fund for regular income,
than Private Provident Fund ( PPF) on this count. You have
the option to change your Fund Manager of you are not D. Some Large Cap fund for long term capital appreciation.
happy with the performance of the Fund. NPS Fund
Specialists generally recommend 60% to 70% of investment
subscribers can contribute to the fund at any point of time
of the financial year and can also change the amount of in Debt fund and a less percentage to Equity fund as it is a
little bit risky ( to avoid capital erosion). To solve this riddle
subscription. They may operate their accounts online from
anywhere. , you may opt for Flexi Cap fund, Balanced Fund or Multi
Cap fund. Suggested funds are ICICI Pru Dividend Yield Fund(
Partial withdrawal from NPS is eligible for tax exemption a top tier dividend yielding fund), HDFC Hybrid Equity fund
when the amount withdrawn is upto 25 % of self ( a popular plan with an aggressive balancing of sovereign
contribution. If the entire accrued pension corpus is less than debt and equity), SBI Blue Chip Fund( don't panic, it invests
Rs 5 lac, subscribers can take 100% lumpsum withdrawal in most robust and best companies with reputation of
amount tax-free. After the death of the subscriber, the yielding returns) and ICICI Prudential Balanced Fund ( a
entire accrued pension corpus would be paid to the balanced hybrid fund with investment more on debt than
subscriber s nominee or legal heir. on equity).

For unorganised sector workers, Atal Pension Yojana ( APY) Let us learn the simple well-known trick - Systematic
is a pension scheme which provides minimum guaranteed Withdrawal Plan work best for retirees as it is an effective
pension of Rs 1000/2000/3000/4000/5000 per month. Citizens tool to earn regular income from your mutual fund
within the age group 18-40 yrs can join the scheme. They accumulated corpus. If your rate of withdrawal is less than
need to have a Savings bank account or PO Bank account the rate at which your fund grows , your capital will continue
with Aadhar card and Mobile number. to grow. If your fund grows at the rate of 9%, you are
comfortable to withdraw at the rate of 7% of accumulated
Let us come to the Last Paragraph of the story. The majority
fund. DON'T FORGET: SIP AVERAGES OUT THE COST OF
of senior citizens prefer to invest in traditional investment
products such as Fixed Income Schemes of Banks or PURCHASE AND SWP AVERAGES OUT THE COST OF
Corporate Bonds. Mutual Fund helps senior citizens to beat WITHDRAWALS. AND YOUR LONGEVITY IS ON THE RISE: SO
Inflation and hedge Real Return. An excellent Mutual Fund PLAN DILIGENTLY FOR A SPAN OF 90/95 YEARS OF QUALITY
scheme can fulfill all the three needs of a senior citizen LIFE.
financially -
1. Capital preservation, TAG LINE IS - START EARLY ( EARN, SAVE, INVEST). BE WISER
AND SMARTER. DIVERSIFY IN YOUTH AND ENJOY IN
2. Capital appreciation, RETIREMENT.
3. Regular income.
Forgot to mention at the beginning - it is now 15 CR
It can ensure low risk, fairly decent return and regular population ( 10.5%) above the age 60 yrs and it will reach
income that is reliable. So if a senior citizen is planning for 34.7cr( 20.8%) by 2050. Still you are curious to know the
suitable mutual fund retirement product, one can make a figure at the end of the Century - IT WILL BE 36% OF TOTAL
combination of - INDIAN POPULATION AND ELDERLY PEOPLE WILL
A. Short term balancec fund for capital appreciation, OUTNUMBER THE CHILDREN OF AGE GROUP 0-14YRS.

26 | 2024 | JULY | BANKING FINANCE