Post Office Scheme SCSS: After retirement, the source of regular income stops, but expenses continue. In such a situation, proper retirement planning becomes extremely important. Most senior citizens look for investment options that are risk-free and provide a fixed amount every month. The Post Office Senior Citizen Savings Scheme fulfills this need.
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What is the Post Office Senior Citizen Savings Scheme?
The Senior Citizen Savings Scheme is a government savings scheme specifically designed for people aged 60 years and above. The investment made in this scheme is considered completely safe as it is guaranteed by the Government of India. Investors receive regular income at a fixed interest rate.
Higher Interest Rate than Bank FDs
Currently, this scheme offers an annual interest rate of 8.2 percent, which is higher than most bank fixed deposits. The special feature is that once the account is opened, the same interest rate remains applicable until maturity, regardless of any future changes in interest rates.
Low Investment and Tax Relief
An account can be opened in this scheme with just Rs. 1000. Along with this, tax exemption is also available on investments up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. This not only provides a secure income but also helps in tax planning.
Who can open this account?
Any person aged 60 years or above can open an account in this scheme. The facility of a joint account with a spouse is also available. Age limits are relaxed in special cases. Employees who have taken VRS can invest in this scheme after the age of 55, and retired defense personnel can invest after the age of 50.
Investment Limit and Maturity Period
A maximum of Rs. 30 lakh can be invested in the Senior Citizen Savings Scheme. The maturity period of the scheme is 5 years, which can be extended for another 3 years. If the account is closed prematurely, a penalty is assessed in accordance with the rules.
How to earn ₹20,500 every month
If an investor invests ₹30 lakh in this scheme through a joint account, they receive interest at the rate of 8.2 percent per annum, which amounts to ₹2,46,000 annually. This interest is paid quarterly, meaning ₹61,500 every three months. Converting this amount to a monthly average, it translates to a regular income of approximately ₹20,500 per month, which continues for the entire 5-year period.
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Nominee and Security Features
In the event of the account holder’s death, the account will be closed, and the entire deposited amount will be transferred to the nominee. This provides financial security to the family and avoids any legal complications.
