In the year 2017, prime minister Narendra Modi announced Varishtha Pension Bima Yojana, a pension plan for senior citizens that would offer a fixed interest of 8% for 10 years.

Features and eligibility conditions

• The plan is designed by the government and integrated by life insurance corporation (LIC) of india. The plan was launched in april 2017 and will be up for subscription for a period of 1 year from the date of the launch.
• The plan is a single premium product.
• Minimum age to buy this plan is 60 years while there is no bar on the maximum age of entry under this plan.
• Maximum investment under the plan is Rs 7,50,000.
• It offers guaranteed 8% annual returns.
• The interest received by the policyholder under this plan will be added to his/her income before calculation of the taxable amount.
• Pension will be paid monthly, quarterly, half yearly or annually as per the need of the policyholder.
• The pension will be directly deposited in the policyholder's bank account.
• In case of death of the policyholder, the premiums paid so far will be given back to the nominee.

How does the plan work?

Let's assume you invest Rs 7,50,000 in the plan. You will receive 8% interest on it annually i.e. 7,50,000 *8% = Rs 60,000 annually, which comes down to Rs 5,000 monthly.