Father's day is around the corner. Across the world, the third Sunday of June is a day that most celebrate and dedicate to their Father.
A Father’s contribution to his kids parenting and upbringing is incomparable. Be it spending the extra hours at office to ensure fees for his kids’ picnic or taking interest in their extra-curricular and career related goals, he does it without fuss. Attending the parent-teachers meeting, teaching you how to ride the cycle, the many surprises that he splurges during your birthday and special days, your best man has done almost everything.
Now that you recollect glimpses of those special moments with your Dad, it’s quite difficult not skipping those weekend moments, when he ends up showing his culinary side with the special brunch and dinner for you and your mom.
This Fathers Day, there are a plenty of options to bring up a smile on the face of your best man.
Your friends, including e-friends such as Google, Amazon and the multiple e-commerce players by now would have shown you some of the options- smartphone, a personal assistant such as Google Home or Amazon’s Alexa, an electronic tablet device to read the newspaper, chocolates, flowers, clothing and even personalized gifts such as hand-made pots, or crockery. These do have some use-case and can be neatly displayed in the living room.
And by now you must have already thought of making this day special. Maybe you are considering a picnic together with family, or a simple self-cooked brunch to show off the culinary prowess that you have inherited from your Dad.
The experience of a good day spent dining and remembering the good old past cannot be undermined, but besides all those nostalgic moments, think of something that could work in the long term. After all, the man who architected your career did indulge in gifting and experiences, but he also took some of the boldest and best financial decisions concerning your happiness, independence and career.
Here are some of the finest financial plans that you could consider gifting for this Fathers Day.
These are bound to offer a greater degree of security. And to top it all, also earn regular interest payouts.
An Immediate Annuity Plan
If your Dad has just retired, gifting him an immediate annuity plan would be a great idea. It is a pension product which can give your Dad, guaranteed income, immediately. You pay a lump sum and the insurer will pay a pension to your Dad, for the rest of his life. Pensions would be paid monthly, quarterly, half-yearly or yearly.
The key in any annuity plan is the payout. You must opt for the life annuity without return of purchase price scheme. This plan is good for people who have no dependents and gives the maximum payout.
Check the track record and the financial strength of the insurer, before availing the immediate annuity plan. You definitely don’t want to gift your Dad a bad plan on Father’s Day.
A Senior Citizen Savings Scheme
Senior Citizen Savings Scheme popularly called SCSS is an excellent retirement plan for your Dad, if he is over 60. You can invest in the Senior Citizen Savings Scheme at Post Offices, Public Sector Banks or Private Banks. SCSS has tenure of 5 years and it can be extended for three more years, after the scheme matures.
You can invest a maximum amount of Rs 15 Lakhs in the Senior Citizen Savings Scheme. Your Dad enjoys an interest of 8.3% on this amount. Interest is paid out each quarter on fixed dates which is the first working day of April, July, October and January. This gives steady income to Dad in retirement.
Gift Dad steady income in retirement with a Senior Citizen Savings Scheme this Father’s Day.
Post Office Monthly Income Scheme
You can gift your Dad a Post Office Monthly Income Scheme (POMIS), so that he enjoys a comfortable retirement. You can invest up to a maximum of Rs 4.5 Lakhs and your Dad can enjoy interest income in his retired years. The tenure of this plan is 5 years.
Post Office Monthly Income Scheme offers an interest of 7.3% a year, payable monthly and your Dad enjoys a monthly pension as payouts are made each month.
Gift your Dad regular monthly payouts with POMIS this Father’s Day.
A Monthly Earning Mutual Fund
Monthly Income Plans (MIPs) of mutual funds are an excellent way to enjoy a regular income, though this income is not guaranteed.
MIPs are debt-oriented mutual funds, but can invest up to 25% in equities. The fund manager manages the MIP in such a way that he tries to give a steady income from the fixed-income portion and the equity portion rises with time.
MIPs offer two options:
* Growth Option
* Dividend Option
MIPs can only declare dividends from the profits made by the fund and not from the capital itself. The fund makes profits through 4 sources: Interest earned from the investment in debt instruments, profits from trading in debt, dividends earned from equity investments and profits obtained through trading in equities. So, the fund can declare dividends only if it makes profits. This is why MIPs cannot give your Dad assured returns. If the fund makes losses, it will not declare any dividends.
MIPs are a very good retirement plan for your Dad as they are well-managed and give a regular income. You need to remember that MIPs do not offer assured returns and have no lock-in period.
A very popular American Writer Clarence Kelland once said, “He didn’t tell me how to live; he lived, and let me watch him do it.”
Also, the man works painstakingly- right from the days of his youth, when hair was all black and in place, unto days of retirement, with the paunch arching out and the hairlinereceding, looking after the grand-kids out of sheer love.
His life's entire mission can be summarized in a few words- ensuring his kids with a great career and an enjoyable, happy and comfortable life. Call him Appa, Aabaa, Pappa, Father, Dad, Daddy, but they have always wanted to show you the right decision for your life. For, they have always fought and thought of your good.
On Father’s Day, Kelland’s saying is quite apt. Gift your Dad a monthly income this Father’s Day, after all he will get to reap the benefits of the higher returns than even a fixed deposit.
Be Wise, Get Rich.
C.S. Sudheer is the CEO & Founder at IndianMoney.com