As a senior citizen, safety of capital is of paramount importance; however don’t forget to take into account the tax factor. Taxes along with inflation can actually erode the value of your returns. Many seniors opt for the security of assured returns and end up finding that the value of their investment has been brought down to almost zero due to this two sided attack on the value of their money.

Being retired and looking forward to spend the remaining days as the golden years of life. You want to spend your time from now to do the things that you would love to do. To live life like you wanted to, you have been busy making a living all these years, it’s now time to take control back into your hands. All this and much more can be easily achieved by smart financial planning that will give you the essential financial security required to make the coming days, the golden years of your life.

There are thousands of options available in the market, which “assure” you of security, but which one of them to choose. Some offered by the government, some by private players, some by PSUs and some by local financial institutions. Developed by bankers, drafted by lawyers and sold by advertisers, each plan will speak to you, like it is THE one to have.

Here we explore few of the most common types of financial planning instruments available in the market, to help you make a better decision and spend the golden years of life in dignity.

Senior Citizens Savings Scheme (SCSS)

This is a scheme started by the Government of India, open to all senior citizens over the age of 60 (people above 55 years can also use this scheme subject to certain conditions). The deposit limit ranges from Rs. 1000 to Rs. 15 lakhs, asking for a minimum commitment of five years. Withdrawal within 2 years attracts a penalty of 1.5% and for after two years but before the expiry of the term the penalty is 1%. Giving you returns of 9% the scheme is good for individuals who have a certain amount of money they can spare. Being from the government, the returns are assured, but with high inflation in recent times, the value may not be much.

Post Office Monthly Income Scheme (POMIS)

The post offices in the country serve as a lot more than just places to post letters and parcels. They have been providing financial services in the farthest part of the country for a very long time. Being backed by the government, they are reliable, but do offer smaller returns.
The POMIS gives you a return of 8% and a bonus of 10% after the end of the tenure, which is six years, for deposits ranging from Rs. 1000 to Rs. 3 lakhs for individuals and Rs. 6 lakhs for joint accounts. You can withdraw the money after three years without any penalty, however, you face a penalty of 5% if you choose do so before that. Providing you with a steady monthly income, the scheme is good for those, who still want the feel of the salary even after they have retired.

Post Office Time Deposit (POTD)

This is similar to term deposits offered by the banks. The minimum amount to be deposited is Rs.200 and there is no maximum limit on the amount deposited. The period for the deposit ranges from 1 year to 5 years and the interest rate ranges from 6.25% to 7%, compounded quarterly. Once again, the scheme is good, if you are looking to increase your money, without getting into risky financial instruments.

Fixed deposits (FD)

Offered by banks and companies, you are better off opting for the bank deposits. Though the interest rates on the bank deposits are lower than the interest rates on company deposits, bank deposits are safer. Always choose deposits with AAA rating, as they are the safest from amongst all the deposits.

Monthly Income Plans (MIP)

If you are looking for higher returns, then these options are suitable for you. These are market linked investment options offered by mutual funds. MIP are a type of balanced funds with 15-20% of their assets in equities. The dividends you get here are tax-free but you have to bear the market risk.

So there you have it, we have covered the major financial planning instruments available in the market, each has its own pros and cons, and you will have to choose wisely and opt for one or a combination of them. As a roundup, we’ve got a table that compares the ones mentioned above.

Comparison of various instruments

Scheme Name






Tenure (In Years)



1 to 5 Years

Up to 5


Min. investment






Max. Investment

15 lakhs

Single -3 lakhs
Joint – 6 lakhs

No limit

No limit

No limit





Highest for AAA rated deposits

Slightly risky

Tax benefits









7.5% (highest)




Do share your experiences or leave a comment for any further clarification – which we will try to address.