Investment Schemes for Senior Citizens

Senior citizens and pensioners mostly prefer low risk investment plans that provide a fixed return. While this is a good approach, the ideal combination should consist of both low and high risk with high return options, in order to create wealth. There are many investment options for senior citizens that can provide them with regular interest payments and a secure financial future.

Those who are receiving monthly pension from their employer might only be interested in growth and wealth creation, while those who are not receiving any pension need a monthly generated income. Let us have a look at some of the investment plans that help in meeting daily expenses and financial growth.

Fixed Deposits and Recurring Deposits (Post Office Schemes and Bank)

Bank fixed deposits and recurring deposits are a very reliable and popular choice among senior citizens as they get almost 0.5% higher interest rates than normal customers.

Post office FDs are also a much safer option for investment and safe returns as they money goes directly to the government. Senior citizens also enjoy tax benefits as interest income upto Rs 50,000 per annum is completely tax free, according to the Income Tax Act 1961.

Here, we can also talk about Company FDs that offer a safe ROI with higher interest rates than banks.

Senior Citizens’ Savings Scheme (SCSS)

This scheme announced by the government yields a very high interest rate at 7.4% as announced by the Center. One can invest as little as 1000 rupees and as high as 15 lakh rupees, this scheme has a maximum maturity period of 5 years and can be extended an additional 3 years. This scheme is perfect for those who are not looking for monthly payouts; SCSS are compounded annually with quarterly payouts.

Tax free Bonds:

These bonds are a safe investment way introduced by the government. The risk of losing money is almost zero and the interest returns are tax-free. However, the interest rates depend on how well the economy is doing and may fall and rise depending on the economy. The tenure for these bonds is quite medium/long term, so this is favourable for those who are not seeking monthly income.

These are some of the best investment options in India for senior citizens. The end decision depends solely on your risk appetite, financial goal whether it is wealth creation or monthly income.

For more options and the best consultation, do not hesitate to contact Investoscope Financials.