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Unless you’ve won a huge lottery, making money work for you should be your life’s mantra. This is especially important if you are nearing your retirement age and need a steady source of income. How do you do that? Begin investing your money in safe schemes that offer lucrative returns. If you are keen on exploring such investment options, keep reading.
Senior Citizens Savings Scheme (SCSS)
| Interest rate | 7.4 % p.a. |
| Payable | Quarterly |
| Tenor | 5 years |
| Tax Benefits | Yes |
| Min to Max Investment Amount | INR 1000 to INR 15 lakh |
Senior Citizens Savings Scheme, as the name suggests is primarily for senior citizens of India seeking to earn a regular income on a quarterly basis. Backed by the Government of India, this scheme has a lock-in period of 5 years and offers tax deduction up to Rs.1.5 lakh p.a. under Section 80C of the Income Tax Act, 1961. Senior citizens of 60 years or above or citizens who have opted for the Voluntary Retirement Scheme (VRS) in the age bracket of 55 to 60 years are eligible for SCSS. In case of premature withdrawals, a penalty may be charged.
Post Office Monthly Income Scheme (POMIS)
| Interest rate | 6.6 % p.a. |
| Payable | Monthly |
| Tenor | 5 years |
| Tax Benefits | None |
| Min to Max Investment Amount | INR 1500 to INR 4.5 lakh for single account and
INR 1500 to INR 9 lakh for joint account |
Post Office Monthly Income Scheme is a low-risk investment scheme, backed by the Government of India that allows you to earn a fixed income every month. Anyone above the age of 10 years is eligible to open a POMIS account. You can also open a joint account (up to 3 people) wherein each joint holder will own an equal share in the account. Premature withdrawals may attract a penalty. However, if you switch cities, you can easily transfer your POMIS account to the Post Office of the current city at zero cost.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
| Interest rate | 8 % p.a. |
| Payable | Monthly |
| Tenor | 10 years |
| Tax Benefits | Yes |
| Min to Max Investment Amount | INR 1.5 lakh to INR 15 lakh |
The Pradhan Mantri Vaya Vandana Yojana is an assured pension scheme launched by the Government of India for the social and financial security of senior citizens. Implemented through the Life Insurance Corporation (LIC) of India, this scheme offers a fixed sum every month. The minimum purchase price is set at Rs 1.5 lakh for a monthly pension of Rs 1,000 and Rs. 15 lakh for a monthly pension of Rs 10,000. Senior citizens above the age of 60 years are qualified to enrol for this scheme. This scheme also allows you to avail a loan of up to 75% of the purchase price after 3 years in case of exigencies.
Tax-free Bonds
| Interest rate | 7.3% to 7.5% p.a. |
| Payable | Annually |
| Tenor | 10 years to 20 years |
| Tax Benefits | Yes |
| Min to Max Investment Amount | Up to INR 5 lakh |
Tax-free bonds, issued by government enterprises, such as the Indian Railway Finance Corporation, and the National Highway Authority of India among others raise funds for capital projects. Senior citizens looking to earn regular income can consider investing in tax-free bonds. However, the lock-in period can go up to 20 years, so it’s advisable to invest in this scheme only for long-term financial goals. The best part, though? These bonds are entirely tax-free!
Fixed Deposits
| Interest rate | Up to 7.05% |
| Payable | Monthly, Quarterly, Semi-Annually, or Annually |
| Tenor | 7 days to 10 years |
| Tax Benefits | Only in case of Tax-Saver FDs |
| Min to Max Investment Amount | Varies for different banks and NBFCs |
Fixed deposit is the best investment choice for seniors as they get a higher interest rate over and above the traditional rates. You can choose among the multiple payment frequencies and start an investment with a minimal amount. Thus, fixed deposits are quite flexible. Certain banks and NBFCs also offer loans against FDs which makes it a feasible choice in case of emergencies.
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