Investment options for pensioners and senior citizens in India

At this stage of your life, you may be looking for the safety of capital protection with stable and regular returns when making investments. Hence, staying away from stock market investments or having a low equity asset allocation is prudent considering the market volatility. When you move away from the stock market today and look at other investment options, you will find that there are several that fit your financial needs and risk appetite. Here’s a list of some of them.

  • Senior Citizen Savings Scheme

The Senior Citizen Savings Scheme (SCSS) is a retirement benefits scheme backed by the government for individuals aged 60 and above. It offers interest at a fixed rate that is set by the government, which is higher than bank fixed deposits; currently, it is 7.40%. The lock-in period is five years, and you have the option of extending it by three years. You can open your SCSS account either through an authorised bank or post office by making a minimum investment of Rs. 1,000 (the maximum is Rs 15 lakh). SCSS comes with a tax deduction benefit under Section 80C of the Income Tax Act, 1961 of up to Rs. 1.5 lakh.

  • National Saving Certificate

The National Saving Certificate (NSC) is another government initiative and is designed to promote savings. It is a savings bond that offers a fixed interest rate, currently 6.80%, and comes with a lock-in period of five years. While the minimum investment amount is Rs. 1,000, there is no maximum limit for investing in NSC. NSC is also eligible for the Section 80C tax deduction.

  • Debt funds

If your risk tolerance is slightly higher, you can consider investing in debt mutual funds. Compared to equity mutual funds, they are safer while still providing higher returns than most pension schemes. Debt mutual funds invest in a range of fixed-income securities such as government bonds, corporate debt, etc. There are different types of debt funds you can select based on the tenure you want to opt for, such as liquid funds and overnight funds. Debt funds also offer more liquidity since they don’t have a lock-in period and you can sell your units at any point during the trading day.

  • National Pension System

The National Pension System (NPS) is a government-sponsored pension scheme that allows you to earn market-linked returns. Anybody between the age of 18 and 70 can open an NPS account and the maximum age to stay invested in NPS is 75. Your NPS returns depend on your asset allocation between four asset classes – equity, government securities, corporate debt, and alternate assets. The lock-in period is till retirement or the age of 60 but you can opt for premature and partial withdrawals subject to certain conditions. NPS also comes with tax benefits under Section 80C along with an additional Rs. 50,000 tax deduction under Section 80CCD(1B).


When you have reached retirement or are close to retirement, it’s important that your investment portfolio has a healthy mix of fixed-income securities, pension schemes, and comprehensive insurance cover. There should still be some proportion of equity investments, however, it’s essential to figure out what that proportion should be. You can consult a financial advisor who can help you align your investments with your financial goals.

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