Retirement is a time to live a happy and peaceful life. Financial stability, informed investment decision and adequate funds for emergencies are key to a healthy and contended life. Choosing the right investment option is crucial in old age. Here is a list of affordable and easy-to-understand investment options for elderly people to help them save and invest.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

Launched in 2017, Pradhan Mantri Vaya Vandana Yojana is a pension/retirement scheme operated and managed by LIC, offering instant annuity plans to senior citizens. This scheme requires the investor to make an initial payment of Rs. 1.5 lakh. A maximum of Rs. 15 lakh can be invested. Upon investing a lumpsum amount, a fixed sum is rewarded to the investor regularly.

This scheme offers an interest rate ranging from 8 percent to 8.3 percent annually. This rate depends on the chosen time payout period- yearly, half-yearly, quarterly, and monthly. The interest rate for FY 2020-21 was reduced to 7.4 percent along with a 3-year extension of the scheme in the Union Budget of 2018-19.

Even though the policy term is 10 years, an early withdrawal is allowed in case emergencies, allowing one to take out 98 percent of your saved fund.

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Post Office Monthly Income Scheme (POMIS)

This is a government-supported scheme with an annual return rate of 7.4 percent, can be paid monthly, and a very reliable space to save up money for retirement. One can opt for a MIS or monthly income scheme for 5 years of lock-in period; after maturity, the total amount can be withdrawn or reinvested. It is one of the safest and low-risk investment options.

The initial deposit amount is Rs. 1000, the maximum being Rs. 9 lakh individually and Rs. 15 lakh jointly. Interest amounts are rewarded monthly. Even though TDS is not applicable, but investments under POMIS are not covered in section 80C.

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Senior Citizen’s Savings Scheme (SCSS)

This is a government scheme for people above the age of 60, providing higher returns without any risk involved. The lock-in period of this scheme is 5 years; in case of withdrawal after one year, the investor must pay the rest as a penalty.

Senior Citizen Fixed Deposits

Fixed deposits are one of the most cherished investment options among Indians as they involve almost zero risk factors. Non-banking financial institutions also provide FDs other than conventional banks. This is one of the most simple, affordable, and hassle-free investment plans, even though the returns may not be as high as other options with higher risk involvement. The tenure ranges from at least 7 days to a maximum of 10 years, with the minimum deposit amount varying from bank to bank.

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Mutual Funds

We all have heard about mutual funds as they are one of the best options to get higher returns. It is easier for senior citizens to invest in mutual funds as the money pooled is managed by professional fund managers. One can invest in either debt-oriented or hybrid mutual funds. This option provides balanced investment approach to those who are willing to take controlled risk to achieve better growth.