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Top 5 Investment Options for Senior Citizens to Earn Monthly Income During Retirement


Investment Options for Senior Citizens to Earn Monthly Income

Retirement is a phase of life that most people look forward to after years of hard work and dedication. However, planning your finances wisely is crucial to enjoy your retirement years. One of the key aspects of retirement planning is ensuring a regular monthly income to maintain your lifestyle and meet your expenses. Senior citizens, in particular, need investment options that provide stable returns without excessive risk. Here, we will explore the top five investment options that can help senior citizens earn a monthly income during their retirement.

1. Senior Citizens’ Saving Scheme (SCSS)

The Senior Citizen Savings Scheme (SCSS) is a government-backed small savings scheme designed specifically for senior citizens aged 60 and above. It offers regular interest income paid quarterly. The interest rates are typically competitive and provide a reliable source of income.

Here are some key features of the SCSS:

  • Lock-in period: 5 years, with premature withdrawal allowed after one year with a penalty.
  • Minimum deposit: Rs 1,000, and in multiples of Rs 1,000, up to a maximum limit of Rs. 30 lakhs.
  • Tax benefits: Qualifies for a tax break under Section 80C.

One of the advantages of the SCSS is its safety, as the government backs it. Additionally, it allows joint account openings with spouses, offering flexibility in managing finances.

2. Post Office Monthly Income Scheme (POMIS)

The Post Office Monthly Income Scheme (POMIS) is another option for senior citizens seeking regular income. It has a five-year fixed investment term and offers monthly interest payments.

Key features of POMIS:

  • Maximum investment limit: Rs 9 lakhs in a single account and Rs 15 lakhs in a joint account.
  • No tax benefits: The interest income from POMIS is fully taxable.
  • Premature withdrawals are allowed with penalties, depending on the duration.

POMIS provides a straightforward way to generate monthly income but lacks the tax benefits of other investment options.

3. Bank Fixed Deposits (FDs)

Bank Fixed Deposits are popular among senior citizens for generating regular income. Most banks offer higher interest rates to seniors, making it an attractive option.

Key features of Bank FDs:

  • Flexible tenure options: You can choose the tenure that suits your needs.
  • Tax-saving FDs: Consider five-year tax-saving FDs for Section 80C tax benefits.
  • Interest payout options: FDs offer flexibility in choosing the frequency of interest payouts.

One strategy is to create an FD ladder by spreading investments across different maturities, ensuring liquidity while managing reinvestment risk.

4. Mutual Funds (MFs)

Mutual funds can allow senior citizens to invest in a diversified portfolio of stocks and bonds. They offer the potential for higher returns, although they come with some level of risk.

Here are some key considerations for senior citizens investing in mutual funds:

  • Equity and debt funds: Diversify your portfolio across equity and debt funds based on your risk tolerance.
  • Stay away from high-risk funds: Avoid thematic, sectoral, and mid- and small-cap funds.
  • Consider debt MFs: Debt funds offer easy liquidity and tax benefits based on the holding period.

Investing in mutual funds can help beat inflation and provide a steady income stream, but choosing funds that align with your risk tolerance and financial goals is essential.

5. RBI Floating Rate Savings Bonds

The RBI Floating Rate Savings Bonds are another secure investment option for senior citizens. These bonds offer interest rates linked to the National Savings Certificate (NSC) with a spread of 0.35%. The interest rate is reviewed semi-annually.

Key features of RBI Floating Rate Savings Bonds:

  • Minimum investment: Rs 1,000, with no maximum limit.
  • Fixed tenure: Seven years, with premature withdrawals allowed for investors aged 60 and above, subject to a minimum lock-in period.
  • Interest payout: Half-yearly.

These bonds are a safe investment option with a competitive interest rate, making them suitable for senior citizens looking for stability.


Senior citizens have several investment options to earn a monthly income during retirement. The investment choice should align with your financial goals, risk tolerance, and liquidity needs. Diversifying your portfolio across these options can provide a balanced approach to retirement income, ensuring a comfortable and financially secure retirement. It’s essential to consult with a financial advisor to create a customized investment strategy tailored to your specific needs and circumstances.


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