3 Best Fixed Investment Options for Senior Citizens

Updated: Friday, January 7, 2022, 19:31 [IST]

You made a lovely living, a career of your choice, now what? Where do you invest your savings for better returns as a senior citizen for your investments? Post-retirement, investment becomes one of the crucial decisions to make. The options are wide, however, the best and safe investment option for you would be a fixed investment option that would help you to turn your dream into possibilities and happy post-retirement life.
In this article, we will focus on the 3 best-fixed investment options that will work for you.

1. Senior Citizen Savings Scheme (SCSS)

It is one of the best and widely picked schemes by retirees in India. The safety and regular income with zero risk makes it a good scheme among retirees. Also, the rate of interest that is 7.4% per annum it offers is one of the best in this segment. The tenure of this is a maximum of 5 years. The scheme is backed by the Government of India (GOI), which makes it a safe destination for your investments. It was first introduced in August 2004 by the GOI keeping senior citizens in the center.

Citizens of India aged above 60 years can invest in the scheme, except for NRIs (Non-Resident Indians) and HUFs (Hindu Undivided Families). Also, people who opted for Voluntary Retirement Scheme at 55-60 age or the retired defense personals between 50 to 60 age group could go with the scheme.

SCSS has an investment bracket of a maximum of Rs 15 Lakh and a minimum Rs 1000 investment amount. The interest payable is quarterly after your first investment. The payout is on the first date of April, July, October, and January concerning the investment date. The investment in this scheme qualifies for the benefit of the 80C section of the Income Tax Act, 1961.

2. Post office Monthly Income Scheme

As the name says the scheme offers you a monthly income on your invested amount. The scheme comes under the direct influence of the Finance Ministry of India. The scheme is not exclusive for senior citizens, which makes it a good option as any Indian Citizen above aged 10 years can invest in this scheme and earn a good return. The scheme also allows you to transfer the account to any other city if you are switching. Every month you receive the interest on your investments in your account under the scheme.

The rate of interest it offers is also high that is 6.6% p.a. as of November 2021. The minimum amount you can invest in the scheme is Rs 1500 and the maximum of Rs 4.5 lakh. Under joint account the maximum amount doubles at Rs 9 lakh. The tenure of this investment scheme is 5 years. It also allows you to continue investment after maturity for another 5 years. No TDS applies to the incomes of the scheme. However, the principal amount is taxable as the scheme is not tax-free under section 80C either.

3. Pradhan Mantri Vaya Vandana Yojana (PMVVY)

PMVYY is a newly introduced scheme by the government of India in 2017. It is a retirement cum-pension scheme managed and operated by the LIC (Life Insurance Corporation). The scheme is exclusively for the senior citizens of India aged above 60 years. The scheme is filled with great benefits, which makes it a good choice for your investment needs. Once you deposit a lump sum amount in this scheme, you will get a fixed payment on a regular basis-monthly, quarterly, half-yearly, or yearly.

The interest rate in the scheme is the highest among all three that is 7.4%. This range grew more specific based on the payout period chosen by you. The tenure of this scheme is 10 years. On premature closure of the scheme is 98% of your initial investment amount. The investment amount is not taxable, however, the return is taxable with respect to your income bracket, and the maturity amount is also taxable.