Best investment options for senior citizens in India for 2013

Best investment options for senior citizens in India for 2013

Best investment options for senior citizens in India for 2013

What are the good investment options available for senior citizens in India. 

Who is a senior citizen I am referring here

Senior citizens have completed 60 years of age and majority of his/her income sources are reduced or stopped, but the expenses are increased. The expenses can be medical expenses or regular monthly expenses.

What is important for senior citizens from investment perspective?

  1. Protection of capital
  2. Easy liquidity of funds
  3. Regular fixed income

What are not best investment options?

Before I talk about, what are good investment options for senior citizens, I would first talk about what are the options where a senior citizen should NOT be looking for.

  1. No to Investment in stocks: As the investments are risky in stock market, senior citizens would definitely want to stay away from these investments.
  2. No to Investment in mutual funds except for debt mutual funds: Though mutual funds provide some safety, but still they are directly related to stock market risks.
  3. No fresh account opening to investment in PPF/NSC: Since the period of investment for PPF is 15 years, it is not advisable to open a PPF account at this point of time. Similar with NSC where the duration is 5 years.
  4. No to investment in company deposits: You can see what is happening to one of the top company where Supreme Court has asked to return the company deposits to all investors. I feel senior citizens should stay away from company fixed deposit schemes where some risk is involved.

Best investment options for senior citizens in India in 2013

  1. Fixed deposits: Fixed deposits are one of the good investment options for senior citizens which offer 0.5% higher interest rates to them comparing to others. Currently interest rates on fixed deposits are falling. However there are banks which are offering good interest rates on FD’s. This is one of the investment options where a senior citizen would definitely look for.
  2. Debt mutual funds: Thought I would not advice seniors to invest in mutual funds, with little risk, one can invest in debt mutual funds. The risk what I am talking is about getting the lower returns comparing to fixed deposits. Current returns from debt mutual funds are 8% to 10% per annum.
  3. Post office – MIS scheme: This is one of the best options for investment for senior citizens. One can invest for 5 years and get monthly interest credited to their account. Current interest rates on Post office MIS scheme is 8.5 % per annum.
  4. Senior Citizen Savings Scheme (SCSS) Account: This is a very good saving scheme for senior citizens offered by banks and Post offices and the interest is 9.3% interest per annum. The good feature is interest is compounded every quarter. Means the interest rate would be still higher. The minimum investment is Rs 1,000 and max is Rs 15 lacs and lock-in period is 5 years.
  5. Investment in gold: Investment in gold is ever green investment. If a senior citizen has already invested in gold ETF’s, they can continue to hold it, but they have a risk that gold prices may correct. By considering this risk, they can still hold the gold ETF’s

Conclusion: No doubt that senior citizens should look for protection of capital, however diversification of their investments, they can get higher returns. I felt these are the best investment options for senior citizens.

Friends, I do not know how many senior citizens would read this article. If you feel this is a good article, please pass this on to your parents, senior citizens whom you know and they may get benefitted. If you also feel that there are other good options which are not covered here, you can leave a comment, I would incorporate in subsequent articles.

Best investment options for senior citizens in India in 2013


  • Prabhakar Bhagavatula

    Sound advice, which I will follow and recommend to my friends. Thank you

  • Murali

    Dear Suresh,
    You are doing an excellent job by making us aware of the current investment plans across all boards. Just felt to request you an investment plan for my 70 year old father. He is a pensioner and medically covered, currently he is having 3 lakh rupees to invest.please tell me where should we invest his amount for best returns….I’ll be obliged.

    • Hi Murali, At this age, he should not be taking any risk of investing in NCD or mutual funds. You should look for safety of money. You can invest in Sr. Citizens Saving schemes offered by bank or post office. 

  • Abhijit

    Hi Suresh.
    My father recently got retired. He is a bit confused abt. investing his retirement funds. He is confused between Senior Citizens saving scheme and Debt fund. He prefers safe investments. I want to understand the post tax returns. Which one would be the ideal option?.

    • Abhijit, I prefer that your father invest in Sr. Citizen saving scheme instead of debt fund. Sr. Citizen saving scheme provides you assured returns. However debt funds on other hand does not provide guaranteed returns. There are risks involved and one need to consider them before investing. 

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