When you are young and on your way to achieving financial freedom, you don't think much about taking risks, be it for a normal life or an investment.

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Your risk appetite is high, and you may invest in market-linked options where the rise and fall are unpredictable.

But in old age, you look for stable income options.

You prefer investment schemes where returns may be low but where you get a steady, tax-free income.

In old age, when people approach retirement age, they look for monetary sources where they don't have to depend on anyone to run their daily expenses.

Amid such a backdrop, they rely on tax-saving investments with guaranteed income or less-risky investment options.

In this write-up, we tell you about these five investment options.

Tax saving fixed deposits (FDs) and recurring deposits (RDs)

These are some of the most popular tax saving options for senior citizens.

Senior citizens get higher interest rates on these schemes.

If one invests in a FD or RD of at least five-year duration, they also get a tax deduction up to Rs 1.50 lakh under Section 80C of the Income Tax Act, 1961.

The schemes are available at post offices and banks. Interest rates may vary from bank to bank. 

National Pension Scheme (NPS)

NPS is aimed at helping people gain financial security at retirement age.

In NPS, account holders get a lump sum at the time of retirement and a monthly pension thereafter.

In the scheme, one can invest from the age of 18 up to 75.

The scheme matures when one reaches the age of 60.

At that stage, one is allowed to take up a maximum of 60 per cent corpus as a lump sum and invest 40 per cent in annuities to get a monthly pension.

While it can give steady income to senior citizens, investments under it are exempt from tax up to Rs 1.50 lakh.

Those with a Tier I NPS account can get a further exemption of Rs 50,000.

The scheme is available to government as well as private sector employees.

Public Provident Fund (PPF)

PPF can be a good tax-saving investment option for senior citizens since the Post Office scheme provides guaranteed returns.

At present, one can get an interest rate of 7.1 per cent which is compounded every year.

The minimum investment in the scheme is Rs 500, while the maximum is Rs 1.50 lakh a year.

PPF deposits up to Rs 1.50 lakh are also exempted under Section 80C of the Income Tax Act.

The scheme comes with a lock-in period of 15 years, but one can withdraw money under certain conditions. 

Tax-free bonds

As the name suggests, earnings, or interest, earned from such bonds are tax free.

Senior citizens can get fixed income from these bonds.

Senior citizens in higher income brackets may opt for them.

While there is no taxation on tax-free bonds, if one sells them after holding them for a year, they are subject to long-term capital gains of 10 per cent.

The bonds are considered secure investment options since they are issued by government institutions such as Power Finance Corporation, National Highway Authority of India, and Rural Electrification Corporation.  

ELSS

Equity Linkes Saving Scheme (ELSS) are tax saving mutual funds that provide tax exemption up to Rs 1.50 lakh under Section 80C.

The funds come with a three-year lock-in period.

ELSS are less risky than many other market-linked equity mutual funds because they invest most of their money in debt securities and bonds.

However, they are popular as they may help senior citizens beat inflation and get good returns.

The best ELSS mutual fund at present, Quant ELSS Tax Saver Fund, has given a 33.97 per cent return in the last three years.

(Disclaimer: The views/suggestions/advices expressed here are for knowledge purpose only. Zee Business suggests its readers to consult their investment advisers before making any financial decision.)