There are several long-term investment plans that can provide investors with stable income, even after retirement. For example, one can invest in long-term government bonds or securities that offer fixed interest rates with maturities from a few months to several years. Additionally, investors can consider monthly income plan mutual funds or real estate investments that provide recurring rental income.

However, in this article, OLM compares only a few fixed-income annuity plans so that investors can plan for their retirement life without return risks. It includes schemes run by the government and India’s largest public sector bank.

SBI Annuity Deposit Scheme

SBI Annuity Deposit Scheme (ADS) is a regular income product for senior citizens who want a safe and reliable income for ten years. Unlike other standard income products, SBI ADS refunds a part of the monthly principal and interest payments. Customers who deposit a one-time lump sum amount receive repayment in monthly annuity instalments, comprising a part of the principal amount and interest. So the monthly payout for SBI ADS is much higher than other regular income products.

SBI ADS is suitable for those who have a lump sum amount to invest and want the income to be much more than what the prevailing interest rates offer. The interest rate is 7 per cent, but the monthly payout can be much higher than the interest-only payout from FDs. But this is because of the principal payment; within 10 years, you will not have any principal amount due. So one should not invest his entire retirement corpus in this scheme, and it is not prudent to rely on this scheme alone for retirement life.

Senior Citizens Savings Scheme (SCSS)

Senior Citizens Savings Scheme (SCSS) is meant for senior citizens looking for regular income. It is a fixed-income product with a high-interest rate of 8.2 per cent, the highest among the options available. The maximum investment limit for SCSS is Rs. 30 lakh, and the tenure is five years. Customers receive a quarterly payout; the initial principal amount is refunded after maturity. In addition, SCSS offer premature withdrawal with some penalties. SCSS also offers Section 80C tax benefits.

Post Office Monthly Income Scheme

Post Office Monthly Income Scheme (POMIS) is a popular investment option for those looking for a regular income source. It offers a steady monthly payout at an interest rate of 7.4 per cent, which is also available for non-senior citizens. The maximum investment limit for POMIS is Rs. 15 lakh, and the tenure is five years.

Customers receive a monthly payout; the initial principal amount is refunded after maturity. POMIS also offer premature withdrawal with some penalties. The interest income from this scheme enjoys a deduction from taxation up to Rs 50,000 under section 80TTB.