Senior citizen saving schmes

Best Investment Schemes for Senior Citizens

Generally, retirement marks the end of a person’s earning period. Since, after retirement, there might be a period of about two decades of dependency, investing in the right options assume an obvious significance.

Thankfully, a number of investment options are available today. These options ensure that the investor leads an hassle-free retirement life.

Senior Citizen Savings Scheme (SCSS)

SCSS is the obvious option available for senior citizens when it comes to investments after retirement. The scheme has a tenure of five years. But it can be extended by another three years once the scheme is mature.

SCSS offers a very attractive interest rate to its investors. The investment is risk-free, and the investor is provided with an option for premature withdrawal. But a small penalty may be imposed in such a case. Also, it is to be noted that withdrawals are entertained only after one year from investing in the scheme.

The maximum amount that can be invested by an investor is capped at Rs 15 lakhs. The interest amount provided to the person is taxable. But the investment is eligible for tax benefits.

The scheme is available for those aged 60 and above. Individuals above 55 years of age, who have either retired or have opted for voluntary retirement are also made eligible to opt for the scheme. Defence personnel enjoys an age relaxation.

Mutual Funds

Mutual funds are a pool of money invested by the public which the company uses to buy securities.The fund is managed by a fund manager, and a small portion from the interest rate to the investor goes to the fund manager as commission for the services.

The main attraction here is their high rates of return when compared to the bank deposits. And if you are new to the world of stock market and do not have a clear understanding of how the market functions, mutual funds might be a worthy option to look forward to!

The facts that mutual funds involve investment in many holdings as opposed to investing in a single holding and that the fund is managed by a professional with significant experience in the field does reduce the chances of incurring a loss. But…


Mutual funds investments are subject to market risks.

Fixed Deposits

An investor invests a fixed amount in a bank or any other financial institution which offers the scheme for a fixed period of time. The investor is free to choose the tenure. It usually ranges from a few days to several years. Until the tenure is over, the investor gets a fixed interest rate on a monthly or quarterly basis.

Their risk-free nature makes them the most popular investment options available in India. Also, the rates of return for senior citizens are fairly higher than the interest rates for others.

The returns are taxable. But no tax will be deducted if the yearly interest rates are less than 10 thousand rupees.

Although the investment made is risk-free, the rates of return are less when compared to some other investment options.

Tax-free Bonds

The government issues these bonds in order to raise funds for projects. The investment is for a very long period of time, that is, ten years or above.

Their main attraction is, as the name suggests, complete tax exemption. Also, the risks associated with the investment is very less as it is a government scheme.

But the investment is for a long period of time, and there may be no provision to withdraw the money prior to the maturity period. But there is a provision to trade the investment to another investor on stock exchanges.

Post Office Monthly Investment (POMIS) Scheme

POMIS is a government backed scheme that guarantees a monthly income in the form of interest rates provided for the investment made.

Since the investment is not subject to market risks, the scheme is absolutely risk-free. The lock-in period for the investment is five years. The investor can also opt to transfer the returns directly into his/her savings account.

A person can start investing even with a very small amount, which in time can be increased. The upper limit for investment is capped at Rs 4.5 lakhs. The same limit is Rs 9 lakhs in case of a joint account.

The interest amount is taxable. The scheme offers no considerable tax benefits. Withdrawal from the scheme is permitted, but only after one year and is subject to a penalty.

Above mentioned are some of the best schemes available in India to senior citizens when it comes to investments after retirement. But, no need to mention, some of these schemes does involve a risk factor that cannot be neglected and are not entirely risk-free. Hence, a complete understanding of the scheme and all possible consequences is to be ensured before investing.

Since for most of the Indians, a source of income is absent, a genuine investment after retirement is necessary to live a tension-free retirement life. The plethora of schemes available in this regard does make retirement life happy and safe.

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