Post Office Senior Citizen Savings Scheme (SCSS) is considered to be a very safe and reliable investment option for senior citizens. Its biggest feature is that your investment is fully guaranteed by the government, which means your money is completely safe. This scheme is ideal for all senior citizens who want a regular monthly income after their retirement.
Investment limit and tax benefits
You can start investing in SCSS with just ₹ 1,000, and a maximum investment of up to ₹ 30 lakh can be made. This scheme not only gives you a high interest rate, but you also get tax benefits under Section 80C of the Income Tax Act. You can get tax exemption on investments up to ₹ 1.5 lakh annually, making your savings even more profitable.
Who can invest
There are some special eligibility criteria for investing in SCSS. Individuals aged 60 years or above can directly invest in this scheme. Civil employees between the ages of 55 and 60 who have opted for the Voluntary Retirement Scheme (VRS) can also join. Retired defence personnel between the ages of 50 and 60 can also avail of the scheme. A person can also open a joint account with his/her spouse, so that both can avail of the benefits.
Scheme tenure and withdrawal rules
The basic tenure of SCSS is five years. But if you wish, you can extend it for an additional three years. However, the scheme also has some withdrawal rules that are important to know. If you close the account within one year of opening it, you will not get any interest. If you close the account between two and five years, 1% of your interest amount will be deducted. If you extend it after the completion of the basic tenure of five years and then make a premature withdrawal, a slightly higher penalty may apply.
How to get a ₹20,000 monthly income
If a senior citizen invests a lump sum of ₹30 lakh, he is assured of an income of around ₹2.46 lakh annually, i.e., around ₹20,500 every month. This regular income is credited directly to your account in the form of interest every three months.
Similarly, if you invest a lump sum of ₹20 lakh in this post office scheme, your maturity amount in 5 years at an interest rate of 8.2% will be ₹28,20,000. This will include interest of ₹41,000 every quarter and a total of ₹8,20,000 in 5 years, giving you a regular income of around ₹13,666 every month.