Answer Book question
An FD pays interest for a fixed term and returns your principal; an annuity pays for life and generally does not return the principal. FD income stops when the FD matures or rates fall; annuity income stops when you die. FD is for money you will want back; annuity is for income you cannot afford to lose.
An FD pays interest for a fixed term and returns your principal; an annuity pays for life and generally does not return the principal. FD income stops when the FD matures or rates fall; annuity income stops when you die. FD is for money you will want back; annuity is for income you cannot afford to lose.
Rates fall. The retiree on FD interest sees income drop at each renewal. The retiree with an annuity sees no change. Ten years later the FD retiree still has his principal; the annuity retiree has had more predictable income and no principal.
Liquidity versus certainty. Neither is right alone. A floor from annuity, a reserve in FDs, growth elsewhere.
Need for principal back Rate-reset risk tolerance Longevity in the family Tax on each
Assuming FD interest is "for life." It resets with rates.
Many Kerala retirees rely entirely on FD renewals and have seen income swing considerably across rate cycles.
₹20 lakh FD at 7 percent: ₹11,700/month, principal returned at maturity, rate resets. ₹20 lakh annuity: ≈ ₹11,000/month for life, no principal.
None. this is a definition of upsides and downsides.
Split the corpus by job: income floor vs. reserve
What is an annuity? Should my parents keep all their money in fixed deposits?
Senior-citizen services
India Post / SCSS rules · IRDAI annuity product guidance · RBI deposit insurance (DICGC) limits · Kerala Social Security Mission and Social Justice Department for pension schemes Rates, limits and whether you may qualify change. Confirm with the official source. Ask Kerala Rising: Send us your parents' rough monthly expenses, their income sources and what lump sum exists. We will help you see whether it holds up. and what to organise before there is an emergency. WhatsApp +1 443 595 9000 · keralarising.com Kerala Rising › Seniors › Retirement · Retirement 8
This page is general orientation, not personal insurance, investment, medical, legal, lending, tax, or professional advice. Rules, rates, benefits, and claim or application decisions can change. Confirm the current position with the named official source and use a licensed or qualified professional where your situation requires one. Kerala Rising does not decide whether you may qualify, approve claims, or promise an outcome.