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Retirement Investment Options

Updated on August 8, 2025 , 16216 views

The most important part of Retirement planning is ‘Investing’. Investing for retirement has to be very effective. There are several investment avenues that you can opt for retirement planning. Let us have a look at some of the most preferred pre- retirement investment options and the post- retirement investment options.

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Pre-Retirement Investment Options

1. New Pension Scheme (NPS)

New Pension Scheme is gaining popularity in India as one of the best retirement investment options. NPS is open to all but, is mandatory for all government employees. An investor can deposit a minimum of INR 500 per month or INR 6000 yearly, making it as the most convenient for Indian citizens. Investors can consider NPS as a good idea for their retirement planning because there is no direct tax exemption during the time of withdrawal as the amount is tax-free as per Tax Act, 1961. This scheme is a risk-free investment as it's backed by the Government of India.

2. Equity Funds

An equity fund is a type of Mutual Fund that invests mainly in stocks. Equity represents ownership in firms (publicly or privately traded) and the aim of the stock ownership is to participate in the growth of the business over a period of time. The wealth you invest in Equity Funds is regulated by SEBI and they frame policies & norms to ensure that the investor’s money is safe. As equities are ideal for long-term investments, it is one of the best retirement investment options. Some of the Best Equity Mutual Funds to invest are:

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2024 (%)
DSP US Flexible Equity Fund Growth ₹67.3209
↑ 0.94
₹93523.38.528.618.116.917.8
Franklin Asian Equity Fund Growth ₹31.3929
↓ -0.25
₹26311.29.71683.614.4
Invesco India Growth Opportunities Fund Growth ₹99.2
↓ -1.06
₹7,88710.611.412.224.52437.5
ICICI Prudential Banking and Financial Services Fund Growth ₹132.18
↓ -0.80
₹10,0882.81011.416.221.611.6
Aditya Birla Sun Life Banking And Financial Services Fund Growth ₹59.47
↓ -0.35
₹3,6252.210.79.916.321.58.7
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 7 Aug 25

Research Highlights & Commentary of 5 Funds showcased

CommentaryDSP US Flexible Equity FundFranklin Asian Equity FundInvesco India Growth Opportunities FundICICI Prudential Banking and Financial Services FundAditya Birla Sun Life Banking And Financial Services Fund
Point 1Bottom quartile AUM (₹935 Cr).Bottom quartile AUM (₹263 Cr).Upper mid AUM (₹7,887 Cr).Highest AUM (₹10,088 Cr).Lower mid AUM (₹3,625 Cr).
Point 2Established history (13+ yrs).Established history (17+ yrs).Oldest track record among peers (18 yrs).Established history (16+ yrs).Established history (11+ yrs).
Point 3Top rated.Rating: 5★ (upper mid).Rating: 5★ (lower mid).Rating: 5★ (bottom quartile).Rating: 5★ (bottom quartile).
Point 4Risk profile: High.Risk profile: High.Risk profile: Moderately High.Risk profile: High.Risk profile: High.
Point 55Y return: 16.91% (bottom quartile).5Y return: 3.64% (bottom quartile).5Y return: 24.05% (top quartile).5Y return: 21.65% (upper mid).5Y return: 21.47% (lower mid).
Point 63Y return: 18.11% (upper mid).3Y return: 7.95% (bottom quartile).3Y return: 24.53% (top quartile).3Y return: 16.23% (bottom quartile).3Y return: 16.33% (lower mid).
Point 71Y return: 28.64% (top quartile).1Y return: 16.03% (upper mid).1Y return: 12.20% (lower mid).1Y return: 11.38% (bottom quartile).1Y return: 9.93% (bottom quartile).
Point 8Alpha: -4.34 (bottom quartile).Alpha: 0.00 (upper mid).Alpha: 9.12 (top quartile).Alpha: -0.92 (lower mid).Alpha: -6.15 (bottom quartile).
Point 9Sharpe: 0.51 (upper mid).Sharpe: 0.42 (bottom quartile).Sharpe: 0.50 (lower mid).Sharpe: 0.72 (top quartile).Sharpe: 0.38 (bottom quartile).
Point 10Information ratio: -0.49 (bottom quartile).Information ratio: 0.00 (bottom quartile).Information ratio: 1.03 (top quartile).Information ratio: 0.11 (lower mid).Information ratio: 0.35 (upper mid).

DSP US Flexible Equity Fund

  • Bottom quartile AUM (₹935 Cr).
  • Established history (13+ yrs).
  • Top rated.
  • Risk profile: High.
  • 5Y return: 16.91% (bottom quartile).
  • 3Y return: 18.11% (upper mid).
  • 1Y return: 28.64% (top quartile).
  • Alpha: -4.34 (bottom quartile).
  • Sharpe: 0.51 (upper mid).
  • Information ratio: -0.49 (bottom quartile).

Franklin Asian Equity Fund

  • Bottom quartile AUM (₹263 Cr).
  • Established history (17+ yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: High.
  • 5Y return: 3.64% (bottom quartile).
  • 3Y return: 7.95% (bottom quartile).
  • 1Y return: 16.03% (upper mid).
  • Alpha: 0.00 (upper mid).
  • Sharpe: 0.42 (bottom quartile).
  • Information ratio: 0.00 (bottom quartile).

Invesco India Growth Opportunities Fund

  • Upper mid AUM (₹7,887 Cr).
  • Oldest track record among peers (18 yrs).
  • Rating: 5★ (lower mid).
  • Risk profile: Moderately High.
  • 5Y return: 24.05% (top quartile).
  • 3Y return: 24.53% (top quartile).
  • 1Y return: 12.20% (lower mid).
  • Alpha: 9.12 (top quartile).
  • Sharpe: 0.50 (lower mid).
  • Information ratio: 1.03 (top quartile).

ICICI Prudential Banking and Financial Services Fund

  • Highest AUM (₹10,088 Cr).
  • Established history (16+ yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: High.
  • 5Y return: 21.65% (upper mid).
  • 3Y return: 16.23% (bottom quartile).
  • 1Y return: 11.38% (bottom quartile).
  • Alpha: -0.92 (lower mid).
  • Sharpe: 0.72 (top quartile).
  • Information ratio: 0.11 (lower mid).

Aditya Birla Sun Life Banking And Financial Services Fund

  • Lower mid AUM (₹3,625 Cr).
  • Established history (11+ yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: High.
  • 5Y return: 21.47% (lower mid).
  • 3Y return: 16.33% (lower mid).
  • 1Y return: 9.93% (bottom quartile).
  • Alpha: -6.15 (bottom quartile).
  • Sharpe: 0.38 (bottom quartile).
  • Information ratio: 0.35 (upper mid).

3. Real Estate

It's the most preferred retirement investment options amongst investors. It is an investment made in the Real Estate, i.e. house/shop/site, etc. It's considered to give good stable returns. To make an investment in real estate, one should consider good location as the key point.

4. Bonds

Bonds are one of the most popular retirement investment options. A bond is a debt security where the buyer/holder initially pays the principal amount for buying the bond from the issuer. The issuer of the bond then pays the holder an interest at regular intervals and also pays the principal amount at the maturity date. Some of the bonds provide good 10-20% p.a.-rate of interest. Also, there is no tax applicable on bonds at the time of investment. Some of the Best Bond Funds to invest are (as per category rank):

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2024 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Aditya Birla Sun Life Corporate Bond Fund Growth ₹113.869
↓ -0.02
₹28,6751.54.58.67.98.56.94%4Y 5M 26D6Y 11M 23D
HDFC Corporate Bond Fund Growth ₹32.8518
↓ 0.00
₹35,6861.74.68.788.66.94%4Y 3M 14D6Y 10M 20D
ICICI Prudential Corporate Bond Fund Growth ₹30.1225
↑ 0.00
₹33,1091.94.78.78.186.83%2Y 4M 20D4Y 1M 24D
Kotak Corporate Bond Fund Standard Growth ₹3,812.49
↑ 0.32
₹17,3041.94.88.97.88.36.84%2Y 10M 24D4Y 22D
Sundaram Corporate Bond Fund Growth ₹40.5587
↑ 0.00
₹7721.84.78.77.486.59%3Y 4Y 3M 4D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 8 Aug 25

Research Highlights & Commentary of 5 Funds showcased

CommentaryAditya Birla Sun Life Corporate Bond FundHDFC Corporate Bond FundICICI Prudential Corporate Bond FundKotak Corporate Bond Fund Standard Sundaram Corporate Bond Fund
Point 1Lower mid AUM (₹28,675 Cr).Highest AUM (₹35,686 Cr).Upper mid AUM (₹33,109 Cr).Bottom quartile AUM (₹17,304 Cr).Bottom quartile AUM (₹772 Cr).
Point 2Oldest track record among peers (28 yrs).Established history (15+ yrs).Established history (16+ yrs).Established history (17+ yrs).Established history (20+ yrs).
Point 3Top rated.Rating: 5★ (upper mid).Rating: 4★ (lower mid).Rating: 4★ (bottom quartile).Rating: 3★ (bottom quartile).
Point 4Risk profile: Moderately Low.Risk profile: Moderately Low.Risk profile: Moderately Low.Risk profile: Moderately Low.Risk profile: Moderately Low.
Point 51Y return: 8.65% (bottom quartile).1Y return: 8.73% (lower mid).1Y return: 8.68% (bottom quartile).1Y return: 8.92% (top quartile).1Y return: 8.75% (upper mid).
Point 61M return: 0.26% (bottom quartile).1M return: 0.30% (lower mid).1M return: 0.37% (top quartile).1M return: 0.31% (upper mid).1M return: 0.29% (bottom quartile).
Point 7Sharpe: 1.66 (bottom quartile).Sharpe: 1.57 (bottom quartile).Sharpe: 2.27 (top quartile).Sharpe: 1.98 (upper mid).Sharpe: 1.71 (lower mid).
Point 8Information ratio: 0.00 (top quartile).Information ratio: 0.00 (upper mid).Information ratio: 0.00 (lower mid).Information ratio: 0.00 (bottom quartile).Information ratio: 0.00 (bottom quartile).
Point 9Yield to maturity (debt): 6.94% (top quartile).Yield to maturity (debt): 6.94% (upper mid).Yield to maturity (debt): 6.83% (bottom quartile).Yield to maturity (debt): 6.84% (lower mid).Yield to maturity (debt): 6.59% (bottom quartile).
Point 10Modified duration: 4.49 yrs (bottom quartile).Modified duration: 4.29 yrs (bottom quartile).Modified duration: 2.39 yrs (top quartile).Modified duration: 2.90 yrs (upper mid).Modified duration: 3.00 yrs (lower mid).

Aditya Birla Sun Life Corporate Bond Fund

  • Lower mid AUM (₹28,675 Cr).
  • Oldest track record among peers (28 yrs).
  • Top rated.
  • Risk profile: Moderately Low.
  • 1Y return: 8.65% (bottom quartile).
  • 1M return: 0.26% (bottom quartile).
  • Sharpe: 1.66 (bottom quartile).
  • Information ratio: 0.00 (top quartile).
  • Yield to maturity (debt): 6.94% (top quartile).
  • Modified duration: 4.49 yrs (bottom quartile).

HDFC Corporate Bond Fund

  • Highest AUM (₹35,686 Cr).
  • Established history (15+ yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: Moderately Low.
  • 1Y return: 8.73% (lower mid).
  • 1M return: 0.30% (lower mid).
  • Sharpe: 1.57 (bottom quartile).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 6.94% (upper mid).
  • Modified duration: 4.29 yrs (bottom quartile).

ICICI Prudential Corporate Bond Fund

  • Upper mid AUM (₹33,109 Cr).
  • Established history (16+ yrs).
  • Rating: 4★ (lower mid).
  • Risk profile: Moderately Low.
  • 1Y return: 8.68% (bottom quartile).
  • 1M return: 0.37% (top quartile).
  • Sharpe: 2.27 (top quartile).
  • Information ratio: 0.00 (lower mid).
  • Yield to maturity (debt): 6.83% (bottom quartile).
  • Modified duration: 2.39 yrs (top quartile).

Kotak Corporate Bond Fund Standard

  • Bottom quartile AUM (₹17,304 Cr).
  • Established history (17+ yrs).
  • Rating: 4★ (bottom quartile).
  • Risk profile: Moderately Low.
  • 1Y return: 8.92% (top quartile).
  • 1M return: 0.31% (upper mid).
  • Sharpe: 1.98 (upper mid).
  • Information ratio: 0.00 (bottom quartile).
  • Yield to maturity (debt): 6.84% (lower mid).
  • Modified duration: 2.90 yrs (upper mid).

Sundaram Corporate Bond Fund

  • Bottom quartile AUM (₹772 Cr).
  • Established history (20+ yrs).
  • Rating: 3★ (bottom quartile).
  • Risk profile: Moderately Low.
  • 1Y return: 8.75% (upper mid).
  • 1M return: 0.29% (bottom quartile).
  • Sharpe: 1.71 (lower mid).
  • Information ratio: 0.00 (bottom quartile).
  • Yield to maturity (debt): 6.59% (bottom quartile).
  • Modified duration: 3.00 yrs (lower mid).

5. Exchange Traded Funds (ETFs)

Exchange traded funds are considered to be one of the popular securities amongst investors. An Exchange Traded Fund (ETF) is a type of investment that is bought and sold on stock exchanges. It holds assets like commodities, bonds, or stocks. An exchange traded fund is like a mutual fund, but unlike a Mutual Fund, ETFs can be sold at any time during the trading period. Moreover, ETFs helps you to build a diverse Portfolio.

Pre-and-Post-Retirement-Investment-Options

Post Retirement Investment Options

1. Senior Citizen Saving Schemes (SCSS)

As part of the post- retirement investment options, an SCSS is designed for retired people who are above 60 years old. SCSS is available through certified banks as well as the network post offices spread across India. This scheme (or SCSS account) is up to five years, but, upon the maturity, it can be subsequently extended for an additional three years. With this investment, tax exemption is eligible under Section 80C.

2. Post Office Monthly Income Scheme (POMIS)

As the name denotes, this is the monthly Income scheme from the Post Office of India. If an investor is looking at a guaranteed regular monthly income, then it's good-to-go with it. The minimum investment for POMIS is Rs 1,000 and the maximum investment goes up to 4.5 lakh for a single account and for a joint account the investment options limit is up to nine lakh. The tenure for POMIS is five years.

3. Annuity

An annuity is an agreement aimed at generating steady income during retirement. Where a lump sum payment is made by an investor to obtain a certain amount instantly or in future. The minimum age entry for any investor in this scheme is 40 years and the maximum is up to 100 years.

4. Reverse Mortgage

As a part of the post- retirement investment options, a reverse mortgage is a good option for senior citizens who need a steady flow of income. In a reverse mortgage, stable money is generated from the lender in lieu of the mortgage on their homes. Any house owner who is 60 years of age (and above) is eligible for this. Retired people can live in their property and receive regular payments, until the death. The money receivable from the Bank will depend on the valuation of property, its current price and well as the condition of the property.

5. Bank Fixed Deposits

Most people consider the Fixed Deposit investment as a part of their retirement investment options because it enables money to be deposited with banks for a fixed maturity period, ranging from 15 days to five years (& above) and it allows to earn a higher rate of interest than other conventional Savings Account. During the time of maturity, the investor receives a return which is equal to the principal and also the interest earned over the duration of the fixed deposit

With this diverse retirement investment options, one would definitely find instruments matching their goals and objectives. Make sure you choose right investment options by knowing in-depth details about it.

As Dwight L. Moody rightly says— “Preparation for old age should begin not later than one's teens. A life which is empty of purpose until 65 will not suddenly become filled on retirement.”

So, for a healthy, wealthy and peaceful retired life, start investing now!

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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