Senior Citizens Savings Scheme: The Senior Citizens Savings Scheme (SCSS) of the post office which gives guaranteed returns is amazing. You can use this to earn income on a monthly or quarterly basis. However, the investment has to be made only once. As long as the scheme has a maturity period, you will earn on a regular basis, and after maturity, you will get back your entire principal amount. You can then invest that principal amount in this scheme and make it a source of regular income. This scheme is especially for senior citizens, but you can also take advantage of this account in the name of your parents.
About SCSS Scheme
Senior Citizens Savings Scheme (SCSS) is a government-backed retirement benefit program. Senior citizens can invest lump sum in this scheme individually or jointly and get regular income with tax benefits. SCSS is the highest interest paying savings scheme of the post office, which can be started in any nearest post office or any authorized bank with some necessary documents. There is sovereign guarantee of the government on small savings of the post office, so there is no tension of safety and returns in it.
Features of this scheme
Investment period: 5 years
Interest rate: 8.2% per annum
Minimum investment: Rs 1000
Maximum investment: Rs 30,00,000
Tax benefits: Up to Rs 1.5 lakh on investment under section 80C of Income Tax Act
Premature closing facility: Available
Nomination facility: Available
How will you get regular income?
Maximum deposit in single account: Rs 30 lakh
Interest rate: 8.2% per annum
Maturity period: 5 years
Annual interest: Rs 2,40,600
Quarterly interest: Rs 60,150
Monthly interest: Rs 20,050
Total interest in 5 years: Rs 12,03,000
Total return: Rs 42,03,000 lakh
How many accounts can be opened?
In Senior Citizens Savings Scheme, you can open a single account or a joint account with your wife. Apart from this, if both husband and wife are eligible for this, then 2 separate accounts can also be opened. A maximum of 30 lakh can be deposited in a single account or a joint account with wife and a maximum of 60 lakh rupees can be deposited in 2 separate accounts. You can extend this account for another 3 years after the maturity of 5 years.
What is the eligibility for the scheme
If you are above 60 years of age or retired employees in the age group of 55-60 years who have opted for Voluntary Retirement Scheme (VRS), they can open an account.
Retired defense personnel, who are at least 60 years of age, can open an account.
HUF and NRI are not eligible to invest in SCSS.
If you withdraw money before maturity
There is a penalty for closing the SCSS account before the lock-in period of 5 years. This penalty depends on how long you have been opening the account.
If the account is closed before one year, no interest is paid on the deposit amount. If interest has been paid, it will be deducted from the principal.
If the account is closed after 1 year but before 2 years, 1.5 percent of the deposit amount is deducted at the time of payment.
If the account is closed after 2 years but before 5 years, 1 percent of the principal amount is deducted.
If your SCSS account is an extended account, no penalty will be charged if the account is closed after one year of extension.
