Saving Schemes For Senior Citizens: A retired person can't work to earn more money, but with his wit and grit, the amount that he has earned during his working days can definitely earn him extra. So, a senior citizen is advised to keep his money at work, constantly. That is the way that money actually grows. How? There are several investment tools that have zero risk and a senior citizen can think of parking money in such investment tools. In fact, these investment options are useful for those who don't want to take any risk while investing.

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Pointing out various Senior Citizens Saving Schemes, CS Sudheer, Founder and CEO at IndianMoney.com said, "Most senior citizens have no earnings after retirement. But, they have option to maximize returns on their investments." Asked about the top 5 investment schemes for senior citizens, Sudheer listed out the following options:

1] Senior Citizens’ Savings Scheme (SCSS): In this government-backed small savings scheme, which is popularly known as SCSS, a senior citizens is offered an interest rate of 7.4% as announced by the Centre for the April to June 2020 quarter. It yields one of the highest interest rates among small savings schemes in India.

Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "You can invest a minimum of Rs 1,000 to a maximum of Rs 15 lakhs in 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."

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2] Post Office Monthly Income Scheme: Also known as Post Office MIS, it is a Government-backed small savings scheme. Post Office MIS 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 proceeds, directly to the senior citizen's post office account, which reduces hassles," said Sudheer.
 
3] Senior Citizens Fixed Deposit: Banks offer a higher interest rate on FDs to senior citizens. Generally, banks offer 09.5 per cent highre interest rate to senior citizens on bank FD, but some banks, especially SBI, HDFC Bank have introduces special senior citizen bank FD scheme where they can earn more than 0.5 per cent. 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. 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 of the income tax act.