Which investment has high returns for senior citizens

There are a variety of investment plans available for senior citizens. But let us get to know about the plan which offers high returns.

As you're about to retire from your working life, you may feel that you have accumulated enough corpus for post-retirement. Most retirees face the challenge of not outliving retirement funds, especially when the life expectancy is increasing at a fast pace. Also, this is when your earnings stop, but does this mean putting a full stop to your investments? You can still invest in various schemes and ensure a regular stream of income. As a senior citizen, you will surely avoid choosing risky securities and transition to low-risk investment options. This is a good time to make use of investment options for senior citizens.

Let us look at some of the investment options for senior citizens:

1. Senior Citizens Savings Scheme or SCSS: This is a Government-sponsored scheme with a tenure of 5 years, which can be extended for three years. This SCSS scheme offers returns at an interest rate of 7.4% per annum. 

2. National Pension System or NPS: This is a pension scheme by the Government of India. Under this NPS scheme, the money of all the investors is pooled together and invested in various asset classes such as Government bonds, corporate bonds and equities. The interest rate on NPS ranges from 12% to 14% per annum. When an NPS Account matures at the age of 60; a senior citizen can operate the NPS Account until the age of 70.
3. Senior Citizen Fixed Deposits: As against the general Fixed Deposit Accounts, banks offer higher interest rates for senior citizens, which can range between 3.25% and 6% per annum. These deposits have a flexible tenure from 7 days to over a decade. As a senior citizen, you get an additional interest rate of 0.30% per annum on your Fixed Deposits with over 5 years’ tenure.
4. Senior Citizen Recurring Deposits: One can also open a Recurring Deposit Account, which offers interest rates starting from 4.60% to 6.50% per annum. This type of investment option has a tenure of a minimum of 6 months up to a maximum tenure of 10 years.
5. Mutual Funds: At the time of retirement, when most seniors aim for capital protection with a fixed income generation, investing in mutual funds needs to be characterised by moderate returns and low-risk capabilities. Debt, balanced and liquid funds fulfil the criteria that senior citizen investment plans. When it comes to selecting a mutual fund scheme, seniors should invest 70% - 75% of funds in debt securities and the rest in equities. This will ensure minimum risk exposure.

These are some of the investment plans available for seniors. Whenever you are planning to invest funds, higher returns should not be the only factor; you should also ascertain your risk tolerance and make an informed decision accordingly.

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