Everyone wants to save some part of their income and invest it in a place where their money is safe and gives good returns. So that they can accumulate a large amount of funds and do not face any shortage of money after retirement. Some people also invest in it with the hope of ensuring regular income in their old age. In this case, post office savings schemes are popular. The Post Office Senior Citizen Savings Scheme (SCSS Scheme) is especially for senior citizens and many banks offer higher interest rates on investments than FDs.
Government guarantees safety of investment
The most important feature of the Post Office Savings Scheme is that the government itself guarantees the safety of every investment made in it. The Post Office Senior Citizen Savings Scheme offers higher interest rates than the interest rates offered on FDs in major banks. Moreover, investing in it can guarantee a regular income of up to Rs 20,000 per month. Investment in this government scheme can be started with just Rs 1,000.
Strong interest rate of 8.2%
Talking about the interest rate offered by POSSC, the government has been offering an interest rate of 8.2% to investors since January 1, 2024. This post office scheme not only provides regular income and safe investment, but also provides tax benefits. The maximum investment limit of this senior citizen savings scheme is Rs 30 lakh. This post office scheme can prove to be very helpful in maintaining a regular income after retirement. Any person aged 60 years and above can open a joint account either alone or with his/her spouse.
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Under this scheme, age relaxation is also provided in some cases. For example, a VRS applicant can be above 55 years and below 60 years at the time of opening the account. Retired defence personnel above 50 years and below 60 years can invest, but certain conditions apply.
Closing the account before maturity is costly
The investment tenure in the Post Office Senior Citizen Scheme is five years, meaning you have to invest for five years to get the full benefits of this scheme. However, if the account is closed before this period, the account holder will have to pay a penalty as per the rules. You can easily open an SCSS account by visiting any nearby post office. Investors in POSCSS are eligible for an annual tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act.
Monthly Income of Rs 20,000
Under this government scheme, investors can start with just Rs 1,000, and the maximum investment can be Rs 30 lakh. The deposit is fixed in multiples of Rs 1,000. Under this scheme, to get a regular income of Rs 20,000, at an interest rate of 8.2%, a person investing approximately Rs 30 lakh will get an annual interest of Rs 2.46 lakh. The monthly interest rate is approximately Rs 20,000.
This post office scheme has a quarterly interest payment facility. Interest is paid on one date in every April, July, October and January. If the account holder dies before maturity, the account is closed and the entire amount is transferred to the nominee mentioned in the document.