Post Office Scheme: Many people have a major concern after retirement. Finding a regular income is the biggest challenge. If you want to ensure that your savings are not only safe but also provide a fixed monthly income, a Post Office scheme could be an excellent option for you. This is a Central Government-guaranteed scheme that provides a regular income along with fixed interest.
We are talking about the Post Office Senior Citizen Scheme, which is specifically designed for senior citizens. The special feature of this scheme is that investing in it involves no risk.
Who can invest in SCSS?
Senior citizens aged 60 and above can avail the benefits of this Post Office scheme. Those retiring between the ages of 55 and 60 can invest in this scheme within one month of retirement. Additionally, those who retired under VRS at the age of 50 or older can also invest in this scheme.
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Learn about the interest rates
You can invest a minimum of ₹1,000 in the Senior Citizen Savings Scheme. The maximum investment limit is ₹30 lakh for a single account holder, and ₹60 lakh for a joint account holder. This scheme is valid for five years, which investors can extend for another three years if they wish.
Currently, the interest rate under this scheme is 8.2% per annum. The interest is deposited directly into the investor’s bank or post office account every three months.
What will be the monthly income?
If an investor deposits ₹15 lakh in this scheme, at an interest rate of 8.2%, they will earn approximately ₹123,000 annually, or approximately ₹11,750 per month. The most important feature of this scheme is that it is independent of market fluctuations. This prevents investors from incurring losses.
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Tax and Withdrawal Rules
Interest earned from SCSS is taxable. The scheme offers a deduction of up to ₹1.5 lakh under Section 80C. If an investor’s annual interest income exceeds ₹50,000, TDS will be levied. If an investor wishes to withdraw funds before maturity, a penalty will be imposed. Withdrawals before the 5 years will incur a deduction of 1% to 2%.
How to Open an Account
Senior Citizen Savings Scheme accounts can be opened at any post office or bank branch across the country. To open an account, investors must provide their Aadhaar card, PAN card, two passport-sized photographs, and proof of the source of investment.