Senior Citizen Saving Scheme: Top 5 investment options for the retired people

Senior Citizen Saving Scheme: After retirement, generally people have little option for earnings and hence their investment becomes one of the most important factors post-retirement. Most people believe after retirement they have got a huge amount they have invested for the retirement funds. However, after retirement, they don't have a job that will give them a regular income. The situation becomes further grim if the retired person is a private employee. So, one needs to continue earning even after retirement and hence investment post-retirement should be taken lightly.

Speaking on the investment post-retirement CS Sudheer, Founder and CEO, IndianMoney.com said, "Most senior citizens have no earnings after retirement. The most important thing for a senior citizen is to maximize return on investment. Take a look at 5 popular investment options for senior citizens."

Aske about the top five investment options post-retirement for the senior citizens CS Sudheer of IndianMoney.com listed out the following five options — Senior Citizen Savings Schemes, Post Office Monthly Income Scheme, Senior Citizen Fixed Deposit, Tax-free bonds and immediate annuities.

1] Senior Citizens Savings Scheme:  Senior Citizens Savings Scheme or SCSS is a government-backed savings scheme; offered to senior citizens, aged 60 years and above. SCSS offers an interest rate of 8.6% for the July to September 2019 quarter. This is one of the highest interest rates among small saving schemes in India. 
You can invest a minimum of Rs 1,000 to a maximum of Rs 15 lakhs in the SCSS. These schemes have a maximum tenure of 5 years with the option of extending the account for an additional 3 years. The deposits in SCSS have compounded annually with quarterly interest payouts. SCSS offers a tax deduction under Section 80C, up to Rs 1.5 Lakhs a year. 

2] Post Office Monthly Income Scheme:  The post office monthly income scheme or POMIS is a Government-backed small savings scheme. POMIS helps senior citizens save a specific amount each month. Senior citizens can open POMIS accounts and deposit a maximum of Rs 4.5 Lakhs or Rs 9 Lakhs through a joint account. POMIS offers an interest rate of 7.6%. POMIS offers what senior citizens seek, it keeps the money safe. POMIS has a lock-in of 5 years and offers higher interest than FDs. The post office credits proceed, directly to the senior citizens' post office account, which reduces hassles. 

3] Senior Citizen Fixed Deposit: Banks offer a higher interest rate on FDs to senior citizens. This could be 0.25% to 0.75% higher than those offered to other individuals. Loans are available against senior citizen FDs. The tenure ranges from 1 to 10 years. Senior citizens can choose to receive regular interest payouts to meet expenses. Senior citizen FDs offer tax benefits under Section 80C up to Rs 1.5 Lakhs a year. 

4] Tax-free bonds: Tax-free bonds are issued by government-backed institutions like PFC, NHAI, REC, IRFC, HUDCO, NTPC which carry the highest safety ratings. The most attractive feature is tax-free interest. Tax-free bonds are an excellent investment for senior citizens to earn a fixed annual income. Senior citizens must invest in tax-free bonds, only if they are willing to stay invested for at least 10 years. 

5] Immediate annuities: Senior citizens can invest in immediate annuity schemes of life insurers. You get guaranteed pension payments in exchange for a lump sum. The pension which is around 5-6% a year is entirely taxable. Immediate annuity schemes have different pension options like pension across a lifetime, after death to spouse and in some cases; return of corpus to heirs. Senior citizens like immediate annuities as they offer guaranteed income across your entire life. The wide range of flexible payout options; protect the senior citizen and his spouse. The premiums of immediate annuity plans are tax-exempt under Section 80C.