The Senior Citizens Savings Scheme (SCSS) is one of the most reliable and safe investment options for senior citizens, offering guaranteed returns along with regular income. This scheme is ideal for retired couples. They can generate a regular income of over ₹40,000 per month by investing in it.
The features of the SCSS scheme are as follows
This is a government savings scheme that currently offers an interest rate of 8.2% per annum. Deposits can be made only once in multiples of ₹1,000, with a maximum deposit amount of up to ₹30 lakh. Investments made in this scheme are fully guaranteed by the government, so there is no risk involved. The lock-in period of the SCSS scheme is 5 years, which can be extended further with the option of a 3-year extension.
Account holders can extend the account for any number of years, up to 3 years, by submitting a form within 1 year of the maturity date or the expiry of the previous 3-year block period. Interest on the extended account will accrue at the rate applicable on the maturity date or extended maturity.
Who can open an account and receive tax benefits in SCSS
Investment rules in this scheme are simple, but there are specific eligibility criteria. First, any senior citizen aged 60 years and above can open an account in SCSS. Second, government employees aged 55 to 60 years who retired under the Voluntary Retirement Scheme (VRS) can also open an account under this scheme.
Third, retired defense personnel aged 50 years and above are also permitted to open an SCSS account, provided they invest their retirement benefits within one month of receiving the amount. However, HUFs and NRIs are not permitted to open accounts under this scheme.
Tax Benefits and Other Features
Investments up to ₹1.5 lakh in this scheme are eligible for tax exemption under Section 80C of the Income Tax Act. The SCSS also offers a nomination facility. This account can be opened at any post office or authorized bank across the country.
How to earn ₹41,000 monthly
A maximum of ₹30 lakh can be deposited under the SCSS scheme in a single account. A maximum of ₹30 lakh can also be deposited in a joint account between a husband and wife. However, the biggest advantage is that if both husband and wife open separate accounts, they can invest a total of up to ₹60 lakh.
Calculating Monthly Income
Since interest payments in SCSS are made quarterly, if you want to generate a monthly income, you can manage interest withdrawals to suit your needs. For example, with an annual interest rate of 8.2% on an investment of ₹30 lakh, the quarterly interest payment would be ₹61,500, which translates to an income of approximately ₹20,500 per month.
If both husband and wife open SCSS accounts and each deposits ₹30 lakh, the total investment would be ₹60 lakh. In this case, the combined monthly income could be up to ₹41,000 (₹20,500 + ₹20,500). Thus, an investment of ₹30 lakh will yield a total interest of ₹12.30 lakh in 5 years, ensuring financial stability for retired couples.