5 Best Investment Options for Pensioners in India

Retirement is an important milestone in everyone’s life. These are the golden years of your life when you can take a break from your responsibilities and enjoy your life. If you have been in a government job and meet certain criteria, you will receive a regular pension in your account. You may receive a pension from EPF or NPS if employed in a private job. You may also receive money from any super annuity plan in which you would have invested. This is the time when you get the benefits of your lifelong investments.

The problem after retirement is that you have limited cash flow and don’t know when you will need money. Moreover, this is also when you are more susceptible to diseases and may have medical emergencies. In such a case, it is a good idea to keep investing even after retirement. But what are the things that you should consider before investing, and what are the available investment options for pensioners in India in 2023? We will answer all of that for you today and try to keep it as realistic as possible. So, scroll down and let us take one step at a time through all of this vital information.

What Should I Know Before Investing as a Pensioner?


As a pensioner, we want you to understand that you can have emergency expenses. We are not trying to scare you, but this is the truth. In such a case, we want you to look at the lock-in period of all the investments that you are making. You must ensure that all these investment options you are considering should be easy to liquidate. There can be times when you need money and cannot liquidate the same, which may lead to financial stress. Plan your expenses accordingly. Apart from this, we don’t wish to recommend any risky investment considering the potential loss and stress that it may lead to. With all this information, you can check out the best investment options for pensioners in India in 2023.

Best Investment Options for Pensioners in India 2023

1. Fixed Deposits

The most popular investment option for a pensioner is a fixed deposit. You can open a fixed deposit in your bank and choose the interest payment as monthly. That will provide you with monthly income, and the banks also provide an elevated interest rate to senior citizens. These are not impacted by market volatility. The general markup on the interest rate is between 0.25% and 0.5%. You can opt for your banking partner for the same. You can also choose interest payouts quarterly, but the monthly option is usually better suited. You can also calculate the returns and the payout using FD calculators. Lastly, you must ensure that the bank should provide you with the option to liquidate FD as required.

2. Pradhan Mantri Vaya Vandana Yojana

One of the newest schemes available for pensioners is Pradhan Mantri Vaya Vandana Yojana. The scheme was launched in 2017, and LIC regulates the plan. There is no upper age limit, but the minimum age required to invest in this scheme is 60. The maximum tenure of the scheme is ten years, and the interest rate offered here was 7.4%. The minimum investment amount here is Rs 1,50,000, and the maximum is Rs 15,00,000. The scheme provides you with a fixed annuity, and you can also take a loan against the pending amount after three years of investment. The scheme comes with a pre-closure option where you get 98% of the initial investment back.

3. Post Office Monthly Income Scheme

An alternative to the fixed deposit is the Post Office Monthly Income Scheme. This scheme is managed by the post office bank, and it is available for anyone over the age of 10 years. The minimum investment amount here is Rs 1,500, and the maximum is Rs 4,50,000. You can invest up to Rs 9,00,000 if you have a joint account. The interest rate for Post Office Monthly Income Scheme varies depending on the repo rate. The rate of interest is slightly higher than the fixed deposit. Moreover, you can also request a pre-closure of the account if you are investing in Post Office Monthly Income Scheme.

4. Senior Citizen Saving Scheme

The next option that you have is the senior citizen saving scheme. This scheme has a sovereign guarantee as the Government of India backs it. It is the best scheme for pensioners seeking to generate a regular income. The scheme is available for individuals over the age of 60. You can opt for this scheme if you are over 55 and have taken voluntary retirement. The interest rates for the senior citizen saving scheme are determined every quarter, much higher than the fixed deposit. The minimum deposit amount in the senior citizen saving scheme is Rs 1,000, and the maximum is Rs 30,00,000. The maximum tenure of the scheme is five years, and it can be renewed for additional three years.

5. Tax-Free Bonds

The last option on our list is tax-free government bonds. These bonds have a high credit rating, and government entities like HUDCO, NHAI, PFC, IRFC and many others issue them. These infrastructure bonds have a long tenure, so a lock-in period is associated with this. The rate of returns can be at par with fixed deposits, and the returns on these bonds are not taxable. There is no minimum or maximum amount associated here.

Final Take

If you are yet to reach retirement, we highly recommend you start building a retirement corpus. In addition, staying prepared in advance can make your golden years fun. Don’t undertake much risk as a pensioner, and ensure that you invest in mostly liquid assets. We have already discussed a lot of details on this page, and we are sure that this information will help you a great deal while you are looking for investment options. If you still have any questions about the investment options for pensioners in India, please feel free to write to us via the comment section. In addition, please note that all the final investment decisions should be taken at your discretion.