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Bank FDs within insurance limits, post office schemes, government bonds, senior citizens' schemes if eligible, and high-quality short-duration debt funds. These protect capital and pay modest, mostly predictable returns. The honest trade-off: over long periods they may barely beat inflation, so the "risk" you avoid in markets shows up as slow erosion instead.
Bank FDs within insurance limits, post office schemes, government bonds, senior citizens' schemes if eligible, and high-quality short-duration debt funds. These protect capital and pay modest, mostly predictable returns. The honest trade-off: over long periods they may barely beat inflation, so the "risk" you avoid in markets shows up as slow erosion instead.
A widow wants no market exposure at all. Kerala Rising helps her lay out an FD ladder across three banks (within insured limits each), a senior citizens' savings scheme for the eligible portion, and a liquid fund for the reserve. She sleeps well. She also understands that in 15 years the purchasing power will be lower.
Capital protection has a price: lower returns. Inflation risk is real but invisible, which is why it is underweighted. A small equity slice. even 15–20 percent. can offset it without much volatility at the portfolio level, but that is a choice, not a requirement.
Deposit insurance limits per bank whether you may qualify for senior citizens' scheme Post office options and their lock-ins Current tax on interest Inflation assumption
Concentrating all deposits in one institution above the insured limit.
Cooperative societies offer attractive rates; check their regulatory status and whether deposit insurance applies. A collapse is a real risk history here.
₹20 lakh: ₹5 lakh each across three banks in FD ladders; ₹5 lakh liquid fund reserve. Interest ~6.5–7.5 percent. Purchasing power after 15 years at 5 percent inflation: roughly half.
A 35-year-old with 30 years to retirement who avoids equity entirely will very likely retire poorer than one who accepted some volatility.
Spread deposits across insured limits Use eligible government schemes Consider a small equity slice after understanding why
What is SCSS and when is it useful? Should my parents keep all their money in fixed deposits? What should stay in cash even if I am investing?
Senior-citizen services · Kerala Rising Money
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