Interest rates in India have fallen over the last one year, particularly interest rates on bank deposits. A few investment instruments have been untouched in terms of interest rates, so as to protect investors like retired individuals.

1) Senior Citizens Saving Schemes

The Senior Citizens Savings Scheme offers an interest rate of 9.30 per cent making it the highest interest rate among most instruments in the country. Investors, who are above 60 year of age can open an account under the scheme. However, investors over 55 years of age can also open if he has either retired or under VRS. Certain other terms like opening within a month of receiving retirement benefits shall apply under the scheme.

2) Sukanya Samriddhi Yojana

The Sukanya Samriddhi Yojana Account offers an interest rate of 9.20 per cent. The account can be opened in the name of the girl child who is 10 years or below. The girl child above this age is not eligible. Parents or guardians can open the account on behalf of the girl child.

This is an excellent scheme that also offers tax benefit under Sec 80C of the Income Tax Act

3) Public Provident Fund

The Public Provident Fund comes with an interest rate of 8.70 per cent. This is one of the most popular investment schemes for two reasons. One is that there is tax benefit under Sec 80C of the Income Tax Act and the other is that the interest income is exempt from tax.

4) Kissan Vikas Patra

With an interest rate of 8.70 per cent, the Kissan Vikas Patra currently offers interest rates that are way better than that being offered by banks. However, neither the interest from the scheme is exempt from tax, neither does one get tax benefit on the KVP. This does not make the scheme to attractive.

5) Post Office Time Deposits

With an interest rate of 8.5 per cent, these are almost at par to most of the other instruments, though they could be slightly better than bank deposits.

6) 5 Year National Savings Certificate

Interest rates offered on the National Savings Certificate is presently at 8.5 per cent. The one advantage of the NSC as it is popularly known is that it offers tax benefit under Sec80C of the Income Tax.

7) Post Office Monthly Income Scheme

The Post Office Monthly Income Scheme comes with an interest of 8.40 per cent each year. This is slightly better than most bank deposits.

8) Bank Fixed Deposits

This is one set of instruments that has taken a hit in terns of interest rates drop. The Reserve Bank of India has cut interest rates by 125 basis points in the last one year. This has led to drop in interest rates from nearly 9.25 per cent, to the present levels of under 8 per cent. It's highly likely that interest rates in the economy might drop even further.

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