Post Office Scheme: Life after retirement is considered peaceful only when there is a stable source of income and no financial worries. This is why people plan their savings and investments during their working years to ensure a regular income even after retirement. For senior citizens, safe investments and guaranteed returns become the top priority.
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Post Office Senior Citizen Savings Scheme
The Post Office Senior Citizen Savings Scheme is a secure investment plan run by the government, specifically designed to keep in mind the needs of senior citizens. This scheme is popular because the invested amount is completely safe, and the return is guaranteed by the Government of India. Unlike market-linked schemes, there is no risk of fluctuations.
Higher Interest Rate than Bank FDs, Absolutely No Risk
Currently, the Post Office Senior Citizen Savings Scheme offers an annual interest rate of 8.2 percent, which is higher than the fixed deposit rates of many banks. This is why retired people looking for safe investments are prioritizing this scheme. Once an account is opened, this interest rate remains applicable until maturity, even if the government changes interest rates in the future.
Low Investment and Tax Relief
Investment in this scheme can be started with just ₹1000, making it accessible to senior citizens of all income groups. In addition, investments made under this scheme are eligible for a tax deduction of up to ₹1.5 lakh annually under Section 80C of the Income Tax Act. This combination of secure returns and tax savings makes it even more attractive.
Who Can Open a Senior Citizen Savings Scheme Account?
Any Indian citizen aged 60 years or older can open an account under this scheme. The facility to open a joint account in the name of the husband and wife is also available. There is a provision for age relaxation in special circumstances. Individuals opting for voluntary retirement can open an account between the ages of 55 and 60, while retired defense personnel can avail of this scheme between the ages of 50 and 60.
Important details regarding the investment limit and maturity
The maximum investment limit in this scheme is set at ₹30 lakh. The account matures in five years and can be extended for another three years if needed. If an account holder closes the account before maturity, a penalty is levied 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.
How to earn ₹20,500 every month
If a person invests ₹30 lakh in this scheme through a joint account, they receive an annual interest of ₹2,46,000 at a rate of 8.2 percent. This interest is paid quarterly in installments of ₹61,500. When this amount is considered every month, it translates to a regular income of approximately ₹20,500 per month. After five years, the investor can withdraw their principal amount or extend the account.