What are the best investment options for senior citizens

There are many investment schemes available in India especially made for the senior citizens. Schemes offered for senior citizens generally provide higher interest rates than what the government, private sector financial institutions would provide to general citizens. Special incentives are provided under the senior citizen schemes to the senior citizens for ensuring their financial security at the time of little or no income after retirement.

The best investment options available for senior citizens in India would include:

1. Senior Citizen Savings Scheme: The scheme is an initiative by the Government of India for ensuring the financial security of the senior citizens. The scheme provides regular quarterly income i.e interest payments to the senior citizens for 5 years on the lump-sum investment made by them. SCSS offers the highest returns among the other small saving schemes.

The features & benefits of the scheme are:

• The interest rates of the schemes are subject to revision every quarter by the government. For the current quarter i.e Q1-FY2021 the SCSS offers an interest rate of 7.4% p.a.

• Only lump-sum investment is allowed, with the minimum amount of deposit to be made is Rs.1,000 and in multiples thereafter. The maximum limit of investment in a financial year is Rs. 15 lacs.

• The maturity of the scheme is 5 years that can be further extended for 3 years more. Pre-mature withdrawals are allowed subject to penalties depending on the tenure completed.

• Investment made in SCSS is eligible for claiming tax deductions of up to Rs. 1.5 lacs under section 80c of IT Act,1961. However, interest earned is fully taxable in the hands of the depositor. Further claims for tax deduction on interest income can be filed under Section 80TTB.

1. Pradhan Mantri Vaya Vandana Yojana- is the scheme introduced in the budget of 2017-18 specially designed for senior citizens, offered by Life Insurance Corporation of India. The scheme promises to provide regular income i.e interest payments monthly, quarterly, semiannually & annually as specified to the senior citizen for 10 years, on the one-time deposit made. The interest rate for the scheme is in the range of 8% to 8.3% p.a. depending upon the selection made. However, the scheme does not offer any tax benefits.

2. Post Office Monthly Income Scheme- Post Office Monthly Income Scheme is a scheme which can satisfy the regular income needs of the senior citizens. It provides monthly interest payments for 5 years on the Lump-sum investment made by the depositor. The current interest rate offered under this scheme is 6.6% p.a.. Pre-mature withdrawals are allowed under this subject to a discount on the investment made.

1. Bank Fixed Deposits- Fixed Deposits in the private or public sector banks is also one of the safest investment options for the senior citizens. The Bank FDs do not offer regular income payments however, it provides higher interest rates to senior citizens(0.25-0.50% higher) than the deposits by general citizens.

Investments in the above-mentioned options can be made by the senior citizens according to their financial needs & requirements.

Rimi Das is an expert content writer and digital marketer. He has authored exceptional content for the health industry.