Srinivas has been a banker all his life. Soon, he is going to retire from his professional career. He has no plans of working during his retirement. So he wants his money to work for him. As a banker, he has explored the best investment options for senior citizens. This is what he found:

Fixed Deposits

Retired people have two major financial needs. One is steady income. Another is safety of capital. Fixed deposits (FDs) score high on both aspects. That is why FDs are the most popular choice among senior citizens. Suppose you invest in an FD. Then you can withdraw the interest on a monthly, quarterly, or yearly basis. Also, senior citizens get a higher FD interest rates. This gives an extra boost to your savings. Remember that it Look for corporate FDs with non-banking finance companies (NBFCs) and other institutions. They tend to offer higher returns to investors.

Current return: Varies between companies from 5.5% to 7.5%

Lock-in period: 7 days to 10 years

Senior Citizen’s Savings Scheme (SCSS)

The SCSS is another popular investment option among retirees. This scheme is available for senior citizens as well as early retirees. You can get this product from any post office or bank in the country. It has a five-year term. But you can extend it by another three years after the scheme matures. It is popular among investors for various reasons. The upper limit is Rs.15 lakh. But investors can open several SCSS accounts if they want to invest more. Investments in this scheme are eligible for tax benefits under Section 80C of the Income Tax Act.

Current return: 8.4% per year

Lock-in period: 5 years (extendable by 3 years)

Post Office Monthly Income Scheme

This is an investment scheme offered by the post office. It is a great option to earn consistent returns. It is ideal for senior citizens. as You will not need not go to the post office every month to collect your money. Instead, the interest you earn can be directly transferred to a savings account. The best way to use this scheme is to transfer the interest amount to a recurring deposit account.

Current return: 7.6% per year, payable monthly

Lock-in period: 5 years

Mutual Funds

Other investment options have their limits. For example, income from interest and dividends can be exposed to may not cope up with inflation rates. To combat this threat, you can invest a part of your money in equity-based mutual funds.

You might think that investing in mutual funds is unsafe for senior citizens. After all, nobody wants to lose their hard-earned money during retirement. So, consider diversifying your portfolio across large-cap funds or balanced funds. This will help you earn good returns with the least exposure to risk. The basic aim of investing in mutual funds at this stage is to earn steady rather than volatile returns. But make sure you avoid risky ventures in mid-cap investments or sectoral funds.

Current return: 10% to 15% average return

Lock-in period: No lock-in period for open-ended schemes. Equity-linked savings schemes (ELSS) have a lock-in period of 3 years.

Pension Plans

It is important for senior citizens to have pension plans in their portfolio. These plans offer a regular source of income at the time of retirement. There are many pension plan schemes in the market. They include schemes offered by the government as well as by private companies.

Current return: 8% (Varishta Pension Bima Yojana by LIC)

Lock-in period: 10 years


Senior citizens should not ‘put all their eggs in one basket’. You need to be careful about your investments when you retire. Suppose you put all your money in a single investment option. You may get low interest rates. The investment might not adjust for inflation. Or you could lose your capital. Instead, invest in a variety of options. Then you can get the best returns according to your financial needs.

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