The best part about investing is that it’s meant for everybody. Whatever goal you have with your wealth at a younger age or post-retirement, there’s always that one plan that you can feel comfortable with.
When it comes to investing as senior citizens, there are a few important factors to consider. As you’re seeking the best investment plans for senior citizens, it’s crucial to settle with a plan that not only seems profitable but also has a lower risk factor.
As an investor that wants to build wealth and enjoy the luxuries of life simultaneously, having a goal with enough profits and wealth building at the same time sounds very attractive.
However, most investment options for senior citizens just provide either of the benefits only, making it important for you to highly personalize your expectations from your investments.
That’s where we come up with some of the best investment plans for senior citizens for you to explore.
Best Investment plans for senior citizens in India in 2022
There are a lot of options for senior citizens’ when it comes to choosing the best investment plan. If you are a salaried person or have a recurring source of income, you can keep contributing to your portfolio without requiring regular profits.
On the other hand, if you don’t receive any kind of pension or have a source of income, you can direct your inclination towards investments that can open a regular income channel for you. So it’s better to figure out your plans first.
Let’s explore some of the best investment options for senior citizens that you can start investing in immediately.
1. Senior Citizen Savings Scheme (SCSS)
The Senior Citizen Savings Scheme (or SCSS) is one of the most preferred investment options for senior citizens.
It is a long-term savings scheme with tangible benefits like
- Security
- Lower risks
- Higher interest rate of 7.4% (subject to change)
You can easily avail the SCSS from post offices or recognized banks in the country. Because of the comparatively better interest rates and tax benefits of up to ₹1.5 lacs every year, this scheme is the go-to investment option for senior citizens.
The SCSS plan has a maturity period of five years and allows you to invest as much as ₹15 Lacs. Before you start, though, you’d also need a nominee for the plan.
2. Pradhan Mantri Vaya Vandana Yojana
Operated by the Life Insurance Corporation (LIC), the Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a low-risk plan for senior citizens, making it the best scheme for senior citizens.
With a,
- Tenure of ten years,
- an interest rate of 7.4%,
- and a preferable scheme for senior citizens,
The PMVVY scheme is built for senior citizens above 60 years of age. You can enter the investment plan with a lump-sum investment.
How the PMVVY scheme works is that you receive a pension in the range of ₹1,000 to ₹10,000 every month depending on the amount you have invested, making it a suitable monthly income scheme for senior citizens.
The scheme also required you to invest a minimum of ₹1.56 Lacs and a maximum of ₹15 Lacs.
3. Mutual Funds
Investing in mutual funds is one of the most efficient methods to start saving for your future and beat inflation at the same time.
The best part about mutual funds is that you can start investing from a very young age and keep on investing till any age you want.
Because of its benefits and returns over a longer period, mutual funds are always one of the best investment plans for senior citizens.
Most importantly, as compared to the rest of the investment plans, mutual funds provide not only inflation-level returns but also significant margins against inflation. You can always try starting your investing journey with mutual funds.
4. Post Office Monthly Income Scheme
Falling under the influence of the Finance Ministry of India, the Post Office Monthly Income Scheme (or POMIS) is a monthly income scheme for senior citizens with a fixed monthly interest.
The POMIS is a low-risk investment plan with an easy entry for everybody.
With an interest rate of 6.6%, the POMIS plan is still a better option for lower-volume investments.
The minimum amount to invest in the scheme is ₹1,500, which goes as high as ₹4.5 Lacs for single accounts and ₹9 Lacs for joint accounts.
5. Senior Citizen Fixed Deposits
Because of the rising costs, most senior citizens fear the exhaustion of interest income. This is why the senior citizen fixed deposits scheme was introduced to provide regular income to people aged 60 or above.
Introduced in 2020, the Senior Citizen Fixed Deposits scheme is available for every senior citizen to invest in. With an interest rate between 6.25% to 7.7% p.a, this investment plan offers more returns than regular FDs.
The minimum amount to invest through this plan is ₹5,000, which can cap at about ₹2 Crores, depending on the bank offering the deposits.
Plan | Eligibility | Rate of Interest p.a | Investment amount | Early Withdrawal | Tenure | Tax Implications |
SCSS | Indians above 60 years of age | 7.4% | ₹1,000 – ₹15,00,000 | Possible but chargeable | 5 years | Only the interest is taxed |
PMVVY | Above 60 years of age | 7.4% | ₹1,50,000 – ₹15,00,000 | Possible | 10 years | Only the interest is taxed |
Mutual Funds | Everybody | Depends on the company | Minimum ₹100 | Possible | Perpetual | Liable to pay capital gains tax |
POMIS | Everybody | 6.6% | ₹1,000 – ₹9,00,000 | Possible but after at least one year | 5 years | No TDS on the returns |
SCFD | Above 60 years of age | Depends on the bank | ₹5,000 – ₹2,00,00,000 | Not possible | 5 years | Tax-free up to ₹50,000 |
Who should invest in these plans?
- Senior citizens who want to generate regular income through their investments
- Investors looking for low risks and a stable monthly income
- Youngsters who want to get started early with investing (e.g., in mutual funds).
Closing Thoughts
Investing plans vary depending on your objectives.
Whether you want to generate a stable income or keep on saving for the future, identify your goal first and then devise a personalized roadmap for your investments.
We hope our list of some of the best investment plans for senior citizens helped you find some options that may help you start your investing journey
