SCSS, FDs, SWP and more: 5 investments for senior citizens to earn steady returns

On Senior Citizens Day (August 21), let's explore safe, income-generating investment options for senior citizens that will guarantee regular cash flow, capital safety, and minimal risk.

Here are some investment options in India for senior citizens to keep cash flowing on:

Senior Citizen Savings Scheme (SCSS) is a government-backed savings scheme in India for senior citizens. Any individual above the age of 60 can invest in this scheme and earn a higher interest rate.

Minimum deposit: ₹1000 and in multiple of ₹1000 and maximum limit up to ₹30 lakh in all SCSS accounts opened by an individual. Both the spouses can open single account and joint accounts with each other with the maximum deposit of up to thirty lakh rupees in each account provided both are individually eligible to open the account.

Investment under this scheme qualifies for the benefit of section 80C of Income Tax Act, 1961

Return: 8.2% per annum (subject to change quarterly)

Payout: Quarterly interest

Tenure: 5 years (extendable by 3 years)

Why it suits seniors: Safe (government-backed), fixed returns, regular income.

The maximum investment limit in the Post Office Monthly Income Scheme (POMIS) is ₹9 lakh for an individual account and ₹15 lakh for a joint account. An investment of ₹9 lakh in a POMIS account can give a monthly interest of ₹5500. An investment of ₹15 lakh in a joint POMIS account can give ₹9250 per month as interest income.

Return: ~7.4% p.a. (as of Q2 FY25-26)

Payout: Monthly interest

Tenure: 5 years

Why it suits seniors: Regular monthly income, capital safety (backed by government).

For senior citizens, interest earned on term deposits is taxable as per their income tax slab, but no TDS is deducted if the total interest from all FDs in a financial year is up to ₹50,000 under Section 80TTB.

Return: 0.25% to 0.75% higher than regular FDs

Payout: Monthly, quarterly, or at maturity

Why it suits seniors: They offer stability, easy to manage, and can serve as a part of a diversified investment portfolio

A Systematic Withdrawal Plan (SWP) allows senior citizens to withdraw a fixed amount regularly from their mutual fund investment, making it a flexible and tax-efficient way to generate retirement income. This is ideal for those with lumpsum savings and moderate risk tolerance.

Return: Can range between 6%–10% (market-linked, varies by fund type)

Payout: Fixed amount monthly/quarterly as chosen

Why it suits seniors: Provides regular income, flexibility to start/stop anytime, tax-efficient withdrawals (only gains taxed), and allows capital to stay invested for growth.

An annuity plan is a financial product that converts a lump sum investment into guaranteed regular income, usually for life. It’s ideal for retirees looking for predictable income without managing market risks. (e.g., LIC Jeevan Akshay VII)

Return: Varies by plan; -6%–7% effective

Payout: Monthly/quarterly/annually (as chosen)

Why it suits seniors: Guaranteed lifelong income, useful if planning retirement cash flow.

August 21 is celebrated as National Senior Citizens Day. In India, a person is considered a senior citizen who is 60 years, and above. It's crucial to make well-informed decisions with a variety of choices available, that align with the financial goals and risk tolerance of the elderly.