Post Office Scheme: How to Earn Rs 20,000 Per Month and Secure Your Retirement

Post Office Scheme: Senior citizens in India frequently find themselves with little to no income post-retirement, and without wise investments, their savings can diminish rapidly. This is the reason the Government of India has launched the Senior Citizens Savings Scheme (SCSS). This small savings initiative allows senior citizens to invest their hard-earned funds and accumulate interest over time.

SCSS also provides tax advantages in certain situations, although it is not entirely tax-exempt. The scheme has drawn the attention of retired investors due to its appealing interest rates, quarterly payouts, and security. Let’s delve into everything you need to know about SCSS and how you can potentially earn over Rs 20,000 each month…

What is SCSS?

SCSS is a government-backed small savings program aimed at assisting senior citizens in stabilizing their financial circumstances after retirement. It offers a secure investment choice for individuals over 60 years old. Retirees who have chosen superannuation, the Voluntary Retirement Scheme (VRS), or the Special VRS and are aged between 55 and 60 can also take advantage of SCSS.

Under specific conditions, retired defense service officers can open an SCSS account upon reaching the age of 50. If you decide to go for SCSS, you can establish the account in your name or jointly with your spouse. The SCSS account has a maturity period of five years, and you can access the funds once the account matures. Alternatively, you have the option to request a three-year extension.

What is the investment limit for SCSS?

The minimum investment in SCSS is Rs 1,000, and subsequent investments can be made in increments of Rs 1,000. The maximum investment limit is Rs 30 lakh. This substantial investment cap enables recent retirees to safely invest their retirement savings in a reliable government scheme.

What is the current interest rate of SCSS?

The current interest rate on the Senior Citizen Savings Scheme is 8.2 percent. Interest rates are revised periodically based on the state of the economy and the prevailing inflation rate. According to the SCSS website, interest will be payable on the first working day of April/July/October/January for deposits up to March 31/June 30/September 30/December 31, and thereafter, interest will be payable on the first working day of April/July/October/January.

How to earn Rs 20,000 per month from SCSS?

It’s possible to earn more than Rs 20,000 per month through SCSS. Let’s illustrate this with an example. Suppose you have a substantial retirement corpus and invest Rs 30 lakh by opening an SCSS account with a bank or post office. The current SCSS interest rate is 8.2% per annum, compounded quarterly. This yields an annual interest of approximately Rs 2.46 lakh. If this amount is divided equally over 12 months, it amounts to Rs 20,500.

What tax benefits are available from SCSS?

Deposits in SCSS are eligible for tax deduction under Section 80-C of the Income Tax Act, 1961. This also makes SCSS a tax-saving form of interest. Under this, you can claim a tax deduction of up to Rs 1.5 lakh from SCSS.