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Top 5 Investment Options for Senior Citizens

Retirement is a vital stage of your life. Whether you are self-employed or salaried, it is essential to secure your future. In addition, this helps you easily manage your regular expenses after retirement with enough funds. 


Building an investment portfolio requires proper planning and extensive research. To help you make an informed choice, here are the top 5 investment options for senior citizens.

1. Fixed Deposits (FD)

fixed deposit is one of the most popular investment options for senior citizens and retirees offered by various banks and non-banking institutions. This is considered the best investment for senior citizens as it is risk-free and has a high earning potential. 


You can easily plan your retirement and become more financially secure during your post-retirement life by investing in an FD. Best of all, the FD investment scheme for senior citizens is stable and safe as market fluctuations or volatility do not affect it. 


Furthermore, senior citizens receive an additional benefit of 0.25-0.50% over the current FD interest rates provided to regular investors. For instance, one of the leading NBFCs, Bajaj Finance offers interest rates of up to 8.60% p.a. for senior citizens. You can use an online fixed deposit interest rates calculator to get an idea about the returns that you will receive on the invested amount.


While you can choose payout at maturity, the non-cumulative mode is ideal for you as a senior citizen. This is because, with the non-cumulative mode, you can get regular interest payouts to manage your recurring expenses after retirement. 


Based on your financial needs, you can opt for a monthly, quarterly, half-yearly or annual payout mode. To understand how a fixed deposit can help generate wealth, you can visit Bajaj Markets and use the online FD calculator. This investment for senior citizens can also provide a loan against the total FD amount during unexpected financial emergencies.

2.Senior Citizen Saving Scheme (SCSS)

This is one of the best senior citizen investment options with a sovereign guarantee. Backed by the Government of India, SCSS is ideal for those seeking to generate regular wealth.


Like FDs, this is a virtually risk-free investment for senior citizens. It provides assured income throughout the scheme duration, and can be quite lucrative too.


While SCSS is only available to individuals over 60 years, note that HUF and NRIs are not eligible for this scheme. However, if you are between 55 and 60 years and opt for voluntary retirement, you can invest in the scheme. 


The SCSS interest rates are revised every quarter, with the current interest rate being 8.0%. This interest rate is applicable from January till March. However, these quarterly revisions do not apply to existing investors. 


The minimum investment in SCSS is ₹1,000, while the maximum is ₹15 Lakhs, and you can invest individually or jointly. The Senior Citizen Savings Scheme has a maximum tenor of 5 years, which can be renewed for an additional three years. 

3. Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The Pradhan Mantri Vaya Vandana Yojana was launched as an investment scheme for senior citizens in 2017. The PMVVY is a retirement and pension plan regulated by LIC. 


The age requirement for the PMVVY scheme is 60 years or more, making it exclusive to senior citizens. While there is no upper age limit, understand that only Indian residents can apply for this scheme. Non-resident Indians cannot avail this investment option.


With a maximum tenor of 10 years, the PMVVY scheme has an interest rate of 7.40% p.a. To invest in this scheme, you have to deposit at least a minimum amount of ₹1.5 Lakhs. The maximum investment amount is capped at ₹15 Lakhs.


This is one of the ideal investment options for senior citizens who wish to invest a lump sum. Once you invest in this scheme, it functions as an immediate annuity that helps you earn a fixed sum every month. 


This investment scheme for senior citizens also offers loans against the invested amount after completing three years of investment.


You can choose multiple pension payout options like monthly, quarterly, half-yearly, or annually. During unforeseen circumstances, you can foreclose the account. In such cases, you can get 98% of your initial contribution.

4. Post Office Monthly Income Scheme (POMIS)

The Post Office Monthly Income Scheme is considered one of the best investment options for senior citizens because of its reliability and adequate interest rate. Moreover, this investment option is not exclusive to senior citizens. 


While there is no maximum age limit for this investment scheme, POMIS is applicable to all Indian nationals aged 10 years or above. The minimum investment amount required to open an account is ₹1500. 


The maximum investment is ₹4.5 Lakhs for a single account and ₹9 Lakhs for a joint account. Note that the interest rate has increased from 6.7% to 7.1%, and the maximum term of investment is 5 years. Additionally, you can transfer your POMIS account from one post office to another within India.


This investment scheme for senior citizens also offers easy withdrawals in case of financial requirements. However, note that you can only request a withdrawal after 1 year of investment. A 2% penalty is levied for withdrawals between the 1st and 3rd year, while a 1% penalty is levied for years 3 and 5.

5. Tax-Free Bonds

These are among the ideal investment options for senior citizens offering secure returns. Tax-free bonds are usually issued by the Government of India and have high credit ratings. A few companies issuing these bonds include PFC, NHAI, IRFC, HUDCO and Indian Railways Finance Corporation.


Since these bond proceeds are invested in various infrastructure projects, their tenors vary from 10 to 20 years. Additionally, there is a lock-in period until the investment matures. 


Tax-free bonds have varying interest rates ranging from 6.5% to 7.5% annually. The annual interest earnings from the bond are not taxable. However, there are no tax benefits on the invested amount. 


These bonds are open to all Indian nationals, including residents and non-residents. Plus, there is no maximum or minimum investment cap when you invest in tax-free bonds.


top 5 investment options

Comparison Between the Best Investment Options for Senior Citizens




Interest Rate

Minimum Deposit Amount



Fixed Deposit

Valid for all Indian residents above 60 years of age

6.25% - 8.60% p.a.

₹5,000 (if booked online) or ₹10,000 (if booked at a bank branch)

7 days -10 years

Tax deduction of up to ₹1.5 Lakhs under Section 80C of the Income Tax Act, 1961.

Senior Citizen Saving Scheme

Indian Citizens aged 60 years and above


Minimum amount is ₹1,000, and the maximum amount is ₹15 Lakhs

5 years

Comes under the ETT (Exempt-Taxed-Taxed) category, and TDS is also applicable

Pradhan Mantri Vaya Vandana Yojana

Exclusively for senior citizens above the age of 60 years. There is no maximum age limit.


Minimum amount is ₹1.5 Lakhs, and the maximum amount is ₹15 Lakhs

10 years

Included in the ETT (Exempt-Taxed-Taxed) category; TDS and GST are not applicable. No tax deduction benefit under Section 80C

Post Office Monthly Income Scheme

All Indian citizens aged 10 years and above


Minimum amount is ₹1,500, and the maximum amount is ₹4.5 Lakhs (individual) and ₹9 Lakhs (joint account)

5 years

Included in the ETT (Exempt-Taxed-Taxed) category; TDS is not applicable. No tax deduction benefit under section 80C

Tax-Free Bonds


6.5% to 7.5%


Above 10 years

Interest is tax-free, and no TDS is deducted

In order to relax and enjoy your golden years as a senior citizen, you must prepare well in advance. Being aware of the various senior citizen investment options helps you plan and lead a secure future post retirement. 


The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort. 

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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FAQs on Investment Options for Senior Citizens

A senior citizen is an Indian citizen who has reached the age of 60 years or more, as defined by the Indian law. A senior citizen is someone who is between the age of 60 and 80 years. They are also referred to as super senior citizens if they are beyond 80 years.

For senior citizens, post office FD rates range from 5.50% to 6.70% p.a. for terms ranging from 7 days to 5 years. In addition, the Senior Citizens Savings Scheme offers an interest rate of 7.40% p.a.

You can apply for an account under the Pradhan Mantri Vaya Vandana Yojana scheme till 31st March 2023.

There are no eligibility parameters for buying tax-free bonds.

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