Best Investment Schemes for Senior Citizens

Senior citizens after retirement require monthly allowances to meet their expenditures and take care of their families especially when they are not subscribed to any pension scheme. Senior citizens generally look for high-return monthly income plans that are risk-free. That is why today in the investment market, there are a high number of curated monthly income plans for senior citizens so that they age gracefully without any financial problem. Let us have a look at some of the best monthly income plans for senior citizens.

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Best Investment Schemes for Senior Citizens

Following are some of the investment options which senior citizens should consider - 

1. Fixed Deposits in Banks

Bank fixed deposits are the easiest and safest income plans for senior citizens. Its risk-free nature has attracted people to choose a suitable interest rate which is flexible and depends from one bank to another. Most of the frontline commercial banks are offering a 6% interest rate on senior citizens bank fixed deposits. In the country, senior citizens are eligible for additional deposits on deposits of five years and above. Banks like the State Bank of India, HDFC Banks, and ICICI Bank are offering additional special deposits on fixed deposits of more than five years. But remember that according to the Deposit Insurance and Credit Guarantee Corporation Act (1861), every depositor is insured up to INR 5 Lakhs for every bank deposit Also, the interest that you get is taxable. 

2. Fixed and Recurring Deposits in Post Office

Fixed deposits and recurring deposits in post offices function the same way as in banks, except the fixed and recurring deposits in post offices are more secure as the money is directly taken up by the government leaving no room for any default. But here also we have fixed deposits and recurring deposits that are insured only up to INR 5 Lakhs just like any commercial bank.

3. Pradhan Mantri Vaya Vandana Yojana

This is one of the best investment schemes for senior citizens in the country that has been backed by the Government of India. In order to become a part of this government scheme, a citizen must be 60 years old. The policy term of the scheme is for 10 years and the investment limit is of INR 15 Lakhs per senior citizen. According to the scheme, assured rates of pensions will be given for policies that have been successfully sold for that year.

4. Senior Citizens’ Saving Scheme

This scheme is a monthly income plan for senior citizens above the age of 60 years. This scheme is functional in banks as well as in post offices. The Senior Citizens’ Saving Scheme has been one of the best investment schemes for senior citizens as it has various tax benefits and a nomination option. The tenure is fixed for five years for a maximum investment of INR 15 Lakhs. The interest that you get on your investment is taxable but after your account reaches its maturity, the term can be extended for three more years. 

5. Post Office Monthly Income Scheme

The Post Office Monthly Income Scheme is one of the low-risk monthly income plans for senior citizens. It has no TDS deduction, so your returns are high. But the investment has been capped at INR 4.5 lakhs for single account holders and INR 9 Lakhs for joint accounts. The interest is currently fixed at a 6.6% rate. The money that has been invested can be withdrawn before maturity but at penalty costs. 

6. Tax-free Government Bonds

Tax-free government bond is one of the securest forms of monthly income plans for senior citizens. They are risk-free as the repayment is guaranteed by the government. The term of the bond can go from 5 years to more than 20 years. The interest rate currently ranges from 7% to 7.5%. Since the interest rate is not fixed, it may not be very lucrative during the economic slowdown. The maximum amount for investment has been capped at INR 15 Lakhs.

In order to invest in the right monthly income plans for senior citizens, one must do a detailed analysis of the tax deduction, the interest rate, tenure of the scheme and other such intricacies. You should opt for a scheme that has stability and gives you assured repayment.  

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