Returns: 9% per annum

Maximum deduction: Rs 1 lakh

Income: Fully taxable

Whether or not you are looking forward to a retired life, there is one sure reason to celebrate. It is called the Senior Citizens Savings Scheme, which offers a higher rate of returns—9% than most bank deposits. Though the income is taxable, it is unlikely that you will pay tax because the exemption limit for senior citizens is Rs 2.4 lakh per year.

The twist is that though you are eligible for earning interest after the age of 60. the tax exemption limit comes into effect only after you complete 65 years. Never mind this minor problem. The impact of the extra paid in five years will be minimal compared with the long-term benefits of this scheme. So do not ignore this option if you are planning a carefree retired life.