Where should senior citizens invest?

After retirement, the biggest concern for senior citizens is to earn regular income with less risk. This concern is more serious because people who have crossed 60 years of age do not have many options to invest in. Senior citizens are left with only two options for big investments. Bank’s Fixed Deposits and Senior Citizen Savings Scheme (SCSS), in which returns are fixed and risk is low. Today we will examine both these schemes to help you choose the right option.

Senior Citizen Savings Scheme i.e. SCSS is currently offering 8.2 percent interest. This interest rate is for the October-December quarter. Like a fixed deposit, once invested in it, the interest rate remains the same throughout the tenure. In this scheme, the account is opened for 5 years which can later be extended for 3 more years. Interest is paid on quarterly basis.

Any person whose age is 60 years or more can open an account in the Senior Citizen Savings Scheme. People whose age is more than 55 years but less than 60 years and have retired or have taken VRS can also open an account.  A maximum of Rs 30 lakh and a minimum of Rs 1000 can be deposited in the Senior Citizen Savings Scheme. On depositing Rs 30 lakh, the senior citizen will get an interest of Rs 61,500 every three months.

People who have crossed the age of 60 get a little more interest on fixed deposits in banks than the general public… Compared to regular FD, the elderly can get up to 100 basis points more returns. Now let us look at the interest rates available to senior citizens on FD in various banks.

State Bank of India i.e. SBI is giving 7.50 percent interest to senior citizens on FD of 5 to 10 years, whereas the 400 day Amrit Kalash Special Scheme is offering 7.60 percent interest. This scheme will be valid till 31 December 2023.

Meanwhile, HDFC Bank is offering 7.75 percent interest to senior citizens on FDs ranging from 5 years-1 day to 10 years. ICICI Bank is offering 7.50 percent interest on FDs ranging from 5 years-1 day to 10 years, while on 15 months to 2 years FD, there is 7.65 percent interest. Axis Bank is giving 7.75 percent interest on FD of 5 to 10 years to the elderly.

Compared to big banks like SBI, HDFC, ICICI and Axis, small banks have been offering higher interest on FD… Let’s take a look at them too. Equitas Small Finance Bank is offering 9% per annum on FD for 444 days to senior citizens. Ujjivan Small Finance Bank is offering 8.75 percent interest on FDs of 12 months and 560 days and RBL Bank is offering 8.30 percent interest on FDs of 15 months to less than 24 months.

Your bank deposit up to Rs 5 lakh is insured. Whereas the Senior Citizen Savings Scheme comes with government backing, hence the risk on your deposit is negligible. In some cases, FDs of small banks are giving more interest than FDs of big banks and senior citizen savings schemes. However, their tenure is short. In such a situation, you can invest your retirement money, keeping in mind your convenience, interest rate and time period.