Are conservative funds right for seniors with modest resources?

My mother is 60 years old and her only source of income is the interest earned on a ₹20 lakh bank FD. “Should she diversify into other assets such as mutual funds or post office savings? If yes, what options would be suitable?

- Nehal Mota

—Name withheld on request

At 60, your mother made a prudent choice by keeping her savings in fixed deposits (FDs). Safety of capital is crucial, and bank deposits provide that. Her ₹20 lakh FD earns ₹1.5-1.6 lakh annually, below the senior citizen exemption limit of ₹4 lakh under new tax regime.

However, relying solely on fixed deposits has limitations. While they offer guaranteed returns, interest rates can fluctuate on renewal.

Room for diversification