Should I Invest in Bonds Instead of SCSS for My Parents?

Ans: "At 72, prioritizing safety and income generation becomes crucial in your investment strategy. While SGBs offer guaranteed returns and tax benefits, if you value guaranteed returns and tax benefits, consider continuing with SGBs. However, there is a 8-year lock-in period but you can sell the SGBs investments in secondary market and If you sell the SGB before its maturity, the gains are taxed as follows:

Within 3 years: Short-term capital gains taxed at your income tax slab rate.
After 3 years: Long-term capital gains taxed at 20% with indexation benefit (reducing tax impact due to inflation).

You can also consider the below options for the investments:-

Post Office Monthly Income Scheme (POMIS):- It provides consistent monthly income and has a 5-year maturity.
Corporate Fixed Deposit:- Generate guaranteed income with a higher rate of interest as compared to traditional FDs.
Corporate/Private Bonds:- It provides a fixed income with higher safety.
Mutual Funds:- Invest in debt funds (lower risk), and if you want to add some equity exposure to your portfolio,you can go for hybrid fund categories as well (like equity savings, balanced advantage, etc). It will help to generate better returns as compared to debt funds with equity taxation which will help to reduce your tax liability. "

Ans: To have a regular income by investing a corpus of Rs. 10 crores, diversified investment options need to be considered so that your risk appetite is considered while maintaining the regular inflows. Investment in bonds and FDs will not be sufficient to cater to your needs as diversified investment options enable us to generate inflation-beating returns.

You can explore other options as well such as the Senior Citizen Savings Scheme, and Monthly Income Scheme (MIS) offered by the government. Furthermore, you can also invest in mutual funds and opt for a SWP (Systematic Withdrawal Plan) which provides regular inflows.

Remember, there's no one-size-fits-all solution. Carefully assess your needs and consult a financial advisor before making any investment decisions.

Ans: Hello;

Too risky. I suggest you to avoid it.

Happy Investing!!