The Post Office Senior Citizen Savings Scheme, which provides pension-like income in retirement, is one of the most reliable options for millions of people to consider for their stable income needs. After leaving a job, everyone wants a secure source of income, and the SCSS meets this need. With benefits like government protection, high interest rates, tax exemptions, and regular income, it’s ideal for those who want a fixed monthly amount without risk.
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Monthly Fixed Income Facility
The most significant feature of the Senior Citizen Savings Scheme is that once a deposit is made, it earns a fixed monthly interest for five years. This scheme is specifically designed for retired individuals who need a regular income. The guaranteed monthly income of approximately ₹20,500 for a deposit of ₹30 lakh makes it one of the most attractive schemes.
Better interest rates than many banks
The government offers an annual interest rate of 8.2 per cent on this scheme, which is higher than fixed deposit rates at most banks. Interest is credited quarterly, totaling ₹2.46 lakh at the end of the year. This provides better financial security to retired individuals and mitigates the impact of rising inflation.
Tax Benefits
Another major advantage of choosing the Senior Citizen Scheme is that investors receive a tax exemption of up to ₹1.5 lakh under Section 80C of the Income Tax Act. This reduces the overall tax burden and eases the financial burden after retirement.
Who Can Invest
There is an age limit for investing in this scheme. Anyone 60 years of age or older can open an account. Additionally, individuals between 55 and 60 years of age who have taken voluntary retirement from government service and those between 50 and 60 years of age who have retired from defense service can also benefit. The account can be opened either singly or jointly.
How to Earn ₹20,500 a Month
If an investor invests ₹30 lakh in this scheme, they will earn approximately ₹2.46 lakh in interest per year at an annual interest rate of 8.2 percent. Spread over 12 months, approximately ₹20,500 per month is credited to their account. This makes it possible to earn stable and reliable income from home after retirement. The scheme has a five-year term, with an option to extend it.
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Option to Close Account If Needed
After opening an account under the Senior Citizen Savings Scheme, investors can close it mid-term if they wish. However, certain rules apply. If the account is closed before one year, no interest is accrued. If the account is closed between one and two years, the interest amount is reduced by 1.5 per cent. If the account is closed between two and five years, a one-percentage-point deduction applies.
