New Delhi, Oct. 28: The government has decided to allow people over 55 years and retired defence personnel to opt for the 9 per cent senior citizens bonds it had announced two months ago.

The Centre has amended the norms for the bond issue to allow more retirees to avail of the scheme. However, deposits by people in the age group of 55 to 60 would be restricted to their retirement benefits or Rs 15 lakh, whichever is lower, an official release said.

The move assumes significance for those who have either taken voluntary separation or have otherwise retired before the normal retirement age of 60. Retired defence personnel have also been allowed to invest in the special scheme. Many defence personnel retire after 14 years of colour service.

The scheme has so far allowed people over 60 years to invest in the special scheme that offers a taxable 9 per cent annual returns.

The release said people who have already retired can invest in the scheme by November 26. The finance ministry has also clarified that all eligible investments made in the 6.5 per cent savings (non-taxable) bonds, 2003, which has been withdrawn since July 10, would continue to get interest as provided in the scheme until it matures.

The scheme for the senior citizens was announced by finance minister P. Chidambaram in this year?s budget.

The new scheme was mooted as a major relief to senior citizens as a three-year softening bias in rates by the Reserve Bank of India has nearly halved interest-earnings from debt instruments. The problem has further been compounded by rising inflation, which is just over the 7 per cent mark. Interest rates are at three-decade lows with the bank rate used to price loans at a low of 6 per cent.

Earnings from investments in small savings schemes is lower by nearly 5 per cent at 8 per cent, down from the 13 per cent level of 2001-02. Public provident fund and special deposit schemes also attract 8 per cent interest rate.