Investing in your 60s? Check out investment options in 2024 for senior citizens

Investment for senior citizens: In the quest for financial stability and income generation during their retirement years, senior citizens in the country are presented with a plethora of investment choices. Recognising the diverse needs and risk appetites of this demographic becomes essential when making investment decisions, say experts.

"As people age, their financial needs change. They may no longer be working or have a regular income, so they need to find ways to generate income from their savings. They may also have more healthcare expenses, so they need to make sure their investments are safe and provide a steady stream of income," MP Deepu, COO, SeniorWorld told Republic.

Here are some prudent investment options for senior citizens in 2024:

Senior Citizens Savings Scheme (SCSS)

Backed by the government, the SCSS offers secure and regular income to senior citizens. Interest rates are revised quarterly by the Ministry of Finance. The scheme provides a steady source of income through quarterly interest payments.

• Interest rate: 8.20 per cent per annum
• Lock-in period: Five years
• Tax benefit: Qualifies for tax deduction under Section 80C
• TDS: TDS deducted for interest above Rs 50,000
• Premature withdrawal: Possible after one year with penalties
• Maximum investment: Rs 30,00,000

Post Office Monthly Income Scheme (POMIS)

Offered by India Post, POMIS provides a low-risk investment avenue for regular monthly income.

• Interest rate: 7.40 per cent per annum
• Lock-in period: Five years
• Premature withdrawal: Possible after one year with penalties
• Maximum investment: Rs 9,00,000 (individual), Rs 15,00,000 (joint account)

Senior Citizen Fixed Deposits (FDs)

Senior citizen FDs, offered by various banks, provide guaranteed returns and flexibility in interest payment intervals.

• Interest rate: Varies (3 per cent to 7 per cent) additional 0.5 per cent for senior citizens
• Interest payment: Regular intervals or maturity
• Tax benefit: Qualifies for tax deduction under Section 80C
• TDS: TDS of 10 per cent for interest above Rs 50,000
• Premature withdrawal:  Possible with penalties

Tax-free bonds

Issued by government infrastructure organisations, tax-free bonds offer a lower-risk investment option with tax-free interest payments.

• Interest rate: 5.5 per cent to 6.5 per cent per annum
• Lock-in period: Until maturity
• Tax benefit: Interest amount is tax-free
• Taxation: Gains from sale taxable; different rates based on tenure
• Risk:  Backed by the government, low-risk option

Mutual funds

Mutual funds offer diverse investment categories like equity, debt, and hybrid funds, catering to various risk profiles.

• Returns: Varies (12 per cent to 15 per cent) per annum for equity funds
• Flexibility: Systematic Withdrawal Plans (SWP) offer regular income
• Tax efficiency: Capital gains tax on withdrawn amount
• Investment method: Systematic Investment Plans (SIP) and SWP

In the silver years, senior citizens often seek both consistent income and capital appreciation. Financial experts advise thorough evaluation of options to align investment strategies with goals and risk tolerance, making informed decisions tailored to personal preferences and needs.