Post Office Scheme: To ensure a comfortable life after retirement without financial stress, everyone wants to save some of their income and invest it in a place that will ensure safe and high returns. Some people plan to have a regular income after retirement. In this regard, one of the Post Office savings schemes is quite popular.
We are talking about the Post Office Senior Citizen Savings Scheme (SCSS Scheme), which is specifically for senior citizens. An investment in this scheme can guarantee a monthly income of Rs 20,500. Investors trust Post Office savings schemes because they are considered risk-free investments. The reason for this is that the government itself guarantees the safety of every investment, big or small. When it comes to the interest offered on the government scheme, Post Office Senior Citizen Savings, even bank FDs fail. The government is offering an excellent interest rate of 8.2 percent on investments in POSCSS.
Investing in this government scheme can be started with just Rs. 1000. This post office scheme not only provides regular income and safe investment, but also offers tax benefits. Investors in POSCSS are eligible for an annual tax exemption of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. The maximum investment limit in this senior citizen savings scheme is Rs. 30 lakh. This post office scheme can prove to be effective in staying financially fit after retirement. A joint account can be opened with any individual aged 60 years or above, or with a spouse.
Regarding the age limit, there are some relaxations. VRS recipients can be over 55 years of age and under 60 years of age at the time of account opening, while retired defense personnel can invest if they are over 50 years of age and under 60 years of age. The maturity period for investing in Post Office Senior Citizen Scheme is five years, which means that you will have to invest for 5 years to avail the full benefits of this scheme. However, if this account is closed before this period, then as per the rules, the account holder has to pay a penalty.
In this government scheme, there is a provision for payment of interest on the investment every three months. In case of death of the account holder before the completion of the maturity period, the account is closed and the entire amount is handed over to the nominee mentioned in the documents.
How to earn Rs 20,500 per month?
You can easily open an SCSS account at any nearby post office. The maximum investment allowed is Rs 1.5 million for a single account and Rs 3 million for a joint account. If an individual invests Rs 30 lakh in a Post Office SCSS joint account, they will receive Rs 61,500 in interest-only payments on a quarterly basis for five years. After five years, they can withdraw their principal of Rs 30 lakh or extend it for another three years. Calculating this on a monthly basis…
Annual interest earning: 8.2% of Rs 30,00,000 = Rs 2,46,000
Quarterly interest earning: Rs 2,46,000/4 = Rs 61,500
Monthly interest earning: Rs 2,46,000/3 = Rs 20,500
It is worth noting that once you invest, the same interest rate remains applicable for your maturity period, even if the government changes the interest rates later as per the quarterly revision.