5 meaningful ways to use your EPF Money

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5 meaningful ways to use your EPF Money

  • Highlights

  • Grow your retirement savings with investments

  • Get periodic returns and stability with Fixed Deposits

  • Get interest rates of up to 8.3% with SCSS

  • Diversified portfolio ensures stability and growth

Experiencing an influx of emotions as you near retirement, is inevitable. With a lifetime’s worth of savings in your EPF account, you may be looking forward to a comfortable retirement.

With your limited savings, life post retirement may not be all that rosy.

You can maximise your savings and ensure smooth retirement by making smarter investment choices. By re-investing your EPF savings in different high-yielding investment options, you can multiply your savings and fund your post-retirement needs.

Here are some meaningful ways to use your EPF money:

Invest in fixed deposits:

Fixed deposits are the best investment avenues for individuals looking to multiply their EPF money. Here’s a look at some of the best advantages of investing in fixed deposits:
1) Get assured return of your principal amount
2) High interest rates with stability
3) Flexible tenor
4) Options to choose periodic gains

These investments are not affected by market forces, so your principal amount remains intact and so, there are no risks. Several company fixed deposits offer high rates of returns, online account management and options to start investing with just Rs.25000.

Consider shares and mutual funds:

Investing in market-linked securities like shares and mutual funds can help you gain from high rates of interest over a short period of time. Mutual funds offer you a rate of return up to 20% based on your portfolio.
These investment optionsare also highly liquid and let you exit your investment any time during the tenor. It is important to note that theyoperate on the market and so, fluctuateconstantly and requireclose monitoring.
Since theseare high-risk options, be sure to balance the risk with low-risk investments and ensure that you invest only a small part of your portfolio in shares and mutual funds.
When investing to grow your savings, making the choice between mutual funds and fixed deposits can be difficult.

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Why do you need more funds post retirement?

Retirement can be a beautiful phase in your life, where you can pursue new hobbies and passion, while also spending quality time with your family and friends.

It can also become taxing at times, when you have limited income to cater to an array of expenses. It is important to have sufficient funds for:

1) Day-to-day expenses
2) Unexpected emergencies
3) Pursuing your hobbies and passion

Post-retirement, your earnings become nil, but your expenses remain constant. Here’s a look at why you need more funds post-retirement:

Do you want to continue enjoying your current standard of living, so you can make most of your retirement? If yes, it is time you start saving for your retirement, and devise plans to make profitable investments.

Build a safety net using SCSS:

Senior Citizens Savings Scheme is an investment option that is customised for you, post retirement. It offers you an interest rate of up to 8.3% and involves investing for a period of 5 years. You can further renew your SCSS for3 more years. You can invest a sum ranging from Rs.1,000 to 15 lakh. This is a stable investment option that is free from the influence of market forces and is backed by the government. Here, you can either open one or manysingle accounts or a joint account.

Use it to invest in real estate:

This is a great investment option that offers you a high rate of return. Besides, investing in real estate can also be used to hedge against inflation. This form of investment also gives you more flexibility. You can purchase one or more residential or commercial properties and put them on rent. You also have the option of letting your investment in a property grow over time, and then selling it when the property prices are high enough. As a thumb rule, ensure that you pick a recent property in an area that has good growth prospects.
Investing your EPF money in a combination of these options can easily help you finance post retirement life. By choosing the right mix of investment options, this approach will allow you to craft a sound investment portfolio that offers you stability of income, and growth of finances for your entire retirement period.

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