Some investment schemes for senior citizens

schemes for senior citizens

Senior citizens seek high-return investment options that provide better security for themselves and their families. The best investment however, is one that provides sufficient returns while ensuring greater safety. Thus, investing in risk-free investment options is as important as having a diverse investment portfolio.

Senior citizens require an investment option which enables them to enjoy the luxuries of a retired life. Most post-retirement investment options are not lucrative enough even if they give high stability. A senior citizen needs to keep a balance of low to medium risk and stable options to earn enough and also safeguard the capital.

Here is the list of some of the recommended investment options for senior citizens:

1. Senior Citizen Fixed Deposits

1. The FD interest rates for senior citizens are higher than the regular rates.

2. These deposits have a flexible tenor ranging from 12 months to 60 months, which you can choose based on your needs.

3. This option helps provide incredible growth to your savings. It also ranks high in terms of liquidity since a fixed deposit can be withdrawn any time during the tenor.

4. This option is safe and free from market variables, thus assuring you a fixed return that you can count on.

5. When opting for a fixed deposit, another advantage is that you can choose from cumulative (with monthly or quarterly payouts) or non-cumulative (with compounded interest offered at maturity) FDs to suit your needs.

6. A non-cumulative option is great for senior citizens as it helps them gain periodic interest payments (monthly, quarterly, or half yearly payout). They can use these payouts to meet regular expenses and for various other investments.

2. Senior Citizen Savings Scheme

1. The Senior Citizen Savings Scheme enables you to invest a sum from Rs.500 to Rs.15 lakh depending on your savings.

2. It can be invested in as soon you as you retire at the age of 58 years. However, it has its limitations as it cannot be availed for more than five years. It can only be renewed once, that too only for a period block of three years.

3. It offers you a high rate of return of 8.6% as per rates announced in Q2 2019 and is a safe investment option.

4. It has a simple application procedure that doesn’t require you to go through lengthy paperwork. All you have to do is fill and submit a form with your documents attached.

Also Read: Senior Citizens Savings Scheme (SCSS)

3. Post Office Monthly Income Scheme

1. This is the best savings scheme that enables you to deposit a maximum of Rs.4.5 lakh for single ownership and up to Rs.9 lakh for joint accounts.

2. This monthly income scheme in India offers you an interest rate up to 7.6% as per rates announced in Q2 2019 in a scheme that is known offer reliable returns, though the income is taxable.

3. This option provides steady and safe returns unaffected by market forces.

4. It also has provision to transfer the returns directly into your savings account for ease of use.

5. This again has a maturity period of 5 years.

4. Tax-free Bonds

1. These are bonds that are issued by the government to raise money for a project.

2. There is absolutely no risk of non-repayment. The interest returns are guaranteed and absolutely tax-free.

3. The tenor for these bonds can go from 10 years to 30 years, depending on the length of the project.

4. The interest rate for these bonds usually range from 7.3% to 7.5% per year and these are on the decline owing to falling interest rates in the economy.

5. There are various government organisations that could require investments. These organisations are like the Indian Railways Finance Corporation, Housing and Development Corporation, NTPC limited and more.

6. The maximum amount that can be invested is up to Rs.10 lakh.

7. However, these bonds do not offer flexible investment terms like FDs and the returns are not very lucrative when the economy is on a slow down.

5. Debt funds

1. Since these are mutual funds that focus on fixed income investments, they are considered safer

2. Long-term debt funds can offer you a higher value depending on the performance of the market.

3. They rank high in return on investment and provide you returns that can go as high as 15% per annum.

4. They also offer high liquidity, though you may need to pay a charge for withdrawal before the minimum investment term.

5. While you can stay invested in these funds, the liquidity factor is essential as you cannot withdraw them with immediate effect. You can always look for alternative investments which offer instant liquidity.

These are some of the best short term investment options in India for those who are retired or considering retirement. Your ultimate decision however, is based on whether you are willing to take risks, especially as some of these schemes are influenced by market forces.

To counter such instability, you should look at company FDs which provide safe and guaranteed returns and are ranked by rating agencies like CRISIL and ICRA. With CRISIL’s FAAA/Stable rating and ICRA’s MAAA/stable rating, you are sure to receive the benefit of assured high returns. You can maximize this benefit by using the multi-deposit feature which lets you invest in a stream of FD investment at regular intervals with a single lumpsum payment. Placing FDs in this manner will ensure instant liquidity at all times. Also, you can avail a loan against one FD in emergency situations while not affecting your returns from other FDs.


  • Senior citizens get higher interest rates
  • Interest rate for tax-free bonds range from 7.3% to 7.5% per year
  • Senior Citizen Saving Scheme has limitations in terms of extension of tenor
  • FDs provide stability to the portfolio against risky investments

DISCLAIMER: The mentioned fixed deposit interest rates are indicative only, and may be subject to change periodically. Please check the interest rates before investment.

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