If someone is above 60 years of age, the Senior Citizen Savings Scheme (SCSS) of the post office is a very good option. This scheme is government-backed, which means your money is completely safe. By investing in it, you can earn a fixed monthly income of more than ₹20,000. Let’s understand how this scheme works and how much profit you can get.
Investment Limit
You can invest in this scheme if you are 60 years or older. Retired people between 55 and 60 years can also join within one month of retirement. Those taking voluntary retirement (VRS) can invest after the age of 50 years.
The maximum investment limit is ₹30 lakh for a single account and ₹60 lakh for a joint account (husband and wife). The minimum deposit is ₹1,000. The scheme runs for 5 years, and it can be extended for another 3 years.
8.2% Annual Interest
At present, the SCSS offers an interest rate of 8.2% per year. This rate is reviewed every three months but usually remains stable.
The interest is paid every quarter (3 months) and is directly deposited into your post office or bank account. If you want, you can also reinvest it.
The interest is taxable, but you can claim a deduction of up to ₹1 lakh under Section 80C. If the total interest in a year exceeds ₹50,000, TDS will be deducted. Still, this scheme gives good tax benefits and a steady income after retirement.
Earn ₹20,500 Every Month from ₹10 Lakh Investment
If someone invests ₹10 lakh in the Senior Citizen Savings Scheme (SCSS), the annual interest at 8.2% will be ₹82,000. Divided quarterly, it comes to ₹20,500 every three months, which can be received as regular income.
Easy to Open Account
You can open this account easily at any post office or registered bank. The required documents are Aadhaar card, PAN card, a recent photo, and proof of investment source.
However, if you withdraw before the lock-in period, there is a 1% penalty for withdrawal after 1 year but before 5 years, and a 2% charge for withdrawal within 1 year.
Best for Long-Term Planning
This scheme is ideal for long-term financial planning, especially for senior citizens. The fixed monthly income helps manage household and medical expenses comfortably during retirement.
