SCSS: After retirement, the regular salary stops, but the expenses don’t. At such a time, a stable source of income becomes crucial to meet medical needs, household expenses, and maintain one’s lifestyle. To fulfill this need, senior citizens look for schemes that are risk-free and provide a continuous income stream.
Read More- Buy Bajaj Platina 110 for just ₹28,000! Amazing mileage too
What is the Post Office Senior Citizen Savings Scheme?
The Post Office Senior Citizen Savings Scheme (SCSS) is a small savings scheme run by the Government of India, specifically designed for retired individuals. The investment made in this scheme is considered completely safe because it is guaranteed by the government itself. This is why it is categorized as a risk-free investment.
The interest rate makes it special
The biggest reason for the popularity of this scheme is its attractive interest rate. Currently, the SCSS offers an annual interest rate of 8.2 percent, which is higher than many bank fixed deposit schemes. The special feature is that once the account is opened, the same interest rate remains applicable for the entire maturity period, regardless of any future changes in interest rates.
Investment limit and tax benefits
Investment in the Post Office Senior Citizen Savings Scheme can be started with as little as ₹1000. A maximum of ₹15 lakh can be invested through a single account, and a total of ₹30 lakh can be invested through a joint account held by a husband and wife. Additionally, investments made in this scheme are eligible for a tax deduction of up to ₹1.5 lakh annually under Section 80C of the Income Tax Act.
Who can open this account?
Any person aged 60 years or older can open an account under this scheme. There are provisions for age relaxation in some special cases. Employees who have taken voluntary retirement can invest in this scheme between the ages of 55 and 60, and retired defense personnel can invest between the ages of 50 and 60.
Maturity and Premature Account Closure Rules
The Senior Citizen Savings Scheme has a maturity period of five years. If the investor wishes, it can be extended for another three years after maturity. However, closing the account before five years incurs a penalty as per the rules. In case of the account holder’s death, the account is closed, and the entire amount is handed over to the nominee.
Read More- OnePlus 15R vs Motorola Signature- Which is the more powerful phone?
How to Earn ₹20,500 Every Month
If an individual invests the maximum amount of ₹30 lakh in this scheme through a joint account, they will receive interest at an annual rate of 8.2 percent, totaling ₹2,46,000 per year. Every quarter, this interest amounts to ₹61,500. When this amount is averaged monthly, it translates to a regular income of approximately ₹20,500 every month, which continues for the entire five-year period.