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How To Choose Right Tax Saving Investment Options For Senior Citizens?

Updated On Feb 11, 2022

Retirement planning is an important aspect of the financial planning process. Retirement is a significant milestone in one's life, and everyone wants to be financially comfortable in their later years. It's critical to invest in the proper investment alternatives and at the right time to build a healthy financial portfolio that will allow you to enjoy a stress-free life after retirement.

As a wise investor, you'd want your money to deliver you consistent returns and help you build wealth once you retire. While some investment alternatives only provide one of the benefits, some investment options provide both. It is critical that you make the appropriate investing decision in order to get the benefits of both worlds. To know more about the right investment options for senior citizens, read on.

How To Choose Right Tax Saving Investment Options For Senior Citizens?

What Are The Investment Options Available For Senior Citizens?

Following are some of the investment options available for senior citizens -

  • Senior Citizen Savings Scheme (SCSS)

The Senior Citizen Savings Scheme is a great tax-saving investment option that is meant to help people financially secure their lives once they retire. This is a beneficial investment choice for those who wish to put money into a long-term savings plan while also receiving other benefits in addition to the security of their investment. SCSS is available at post offices and banks around the country. The plan pays a current interest rate of 7.4% per year. The scheme's interest rate is set by the Ministry of Finance and is subject to change on a regular basis. With the exception of providing you with a stable paycheck after retirement, the strategy also allows you to save money on taxes thanks to Section 80C of the Internal Revenue Code.

  • Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) programme, run by the Life Insurance Corporation of India, is a low-risk investment plan that is especially designed to offer individuals with a regular assured return after retirement. The Pradhan Mantri Vaya Vandana Yojana has a 10-year policy term and a set interest rate of 8% per annum. The monthly annuity granted by PMVVY varies based on the quantity invested in the plan. It ranges from Rs.1,000 to Rs.10,000. In a financial year, the maximum investment cost for a monthly pension is Rs.15 lakh. Despite the fact that PMVVY does not provide any tax benefits to investors, the programme is exempt from the Goods and Service Tax.

  • Recurring Deposits And Fixed Deposits

Fixed deposits (FDs) and recurring deposits (RDs) are two of the most secure and popular investing options for seniors. The bank's interest rates on FDs and RDs for older persons are significantly higher. Furthermore, under Section 80 TTB of the Income Tax Act, senior citizens are tax-free on interest income up to Rs.50,000 per financial year. FD and RD accounts allow you to build up cash overtime and get a guaranteed return on your investment. As the safest investment choice, it is unquestionably a remunerative tax saving investment option for elderly folks, with the added bonus of tax savings and a guaranteed investment return. 

  • Mutual Funds

Equity mutual funds are a worthwhile investment option available in the market if you are willing to take a high risk on your investment and want to multiply your money. About 60 percent to 65 percent of equity mutual fund investments are made in equities and equity-related assets with the goal of achieving a greater long-term return on investment. Even while equities funds have a high level of risk, their long-term returns surpass fixed-income investments and inflation by a wide margin.


Retirement age has its own set of advantages and disadvantages. It is critical to build a long-term financial strategy for retirement in order to have a tranquil retirement. If you want to build a strong retirement strategy for the future, you may invest in these plans as needed. They not only give a guaranteed return on capital but also serve as a superb tax-saving investment alternative.

Also read - EPF Vs. PPF - Which Is Better?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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