My retired father has a corpus of around 10 lakh which he wants to invest in some monthly income scheme to get monthly returns. Please suggest some good options where the risks will be not too high and returns should beat inflation?

Ans: Given your father's priorities of low risk and beating inflation, here are a couple of good options for him to consider investing his Rs 10 lakh corpus for monthly income:

1. Senior Citizen Savings Scheme (SCSS):

• This is a government-backed scheme specifically designed for senior citizens (above 60 years).
• It offers a relatively high and stable interest rate (currently 8.2% per annum).
• Interest is paid quarterly, but can be used to generate a monthly income by dividing it into three parts.
• There is a maximum investment limit of Rs 15 lakh.
• The scheme has tenure of 5 years, with an option to extend for 3 more years.

2. Pradhan Mantri Vaya Vandana Yojana (PMVVY):

• This is another government-backed scheme specifically for senior citizens. Do note that the scheme's availability may be limited based on the date of your inquiry (April 10, 2024).
• It offers a fixed interest rate (currently 7.4% per annum) for a 10-year policy term.
• The interest can be paid monthly, quarterly, half-yearly, or yearly.
• There is a maximum investment limit of Rs 15 lakh.

Additional factors to consider:

• Tax implications: Interest earned from both schemes is taxable as per your father's income tax slab.
• Liquidity: SCSS offers more flexibility as the principal amount can be withdrawn prematurely with a penalty. PMVVY has limited liquidity options.

Recommendation:

Both SCSS and PMVVY are good options for your father depending on his preference for interest rate (higher with SCSS but not fixed) vs. guaranteed income (PMVVY with a fixed rate for 10 years).

It's advisable to consult a financial advisor for personalised advice considering your father's overall financial situation and risk tolerance.