Post Office schemes are popular not only for their risk-free investment but also for the excellent interest rates offered by the government. Regular income schemes are also available at the post office to ensure a life after retirement without financial hassles.
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Post Office schemes: To enjoy life after retirement without any financial stress, everyone wants to save some of their income and invest it in a place where their money is safe and provides strong returns. Some people plan their investment so that they can have a regular income after retirement.
In this regard, one of the Post Office savings schemes is quite popular. We are talking about the Post Office Senior Citizen Savings Scheme (SCSS Scheme), which is specifically for senior citizens. An investment in this scheme can guarantee a monthly income of Rs 20,500.
Zero risk, great interest
Investors trust Post Office savings schemes because they are considered risk-free investments. This is because the government itself guarantees the safety of every investment, big or small. When it comes to the interest rates offered on the government scheme, Post Office Senior Citizen Savings Scheme, even bank FDs fail. The government is offering an impressive 8.2% interest rate on investments in POSCSS.
Starting at just ₹1,000, tax benefits also apply
Investing in this government scheme can begin with just ₹1,000. This post office scheme not only provides regular income and secure investments, but also offers tax benefits. Investors in POSCSS are eligible for an annual tax deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. The maximum investment limit for this senior citizen savings scheme is ₹30 lakh. This post office scheme can prove to be effective in maintaining financial fitness after retirement. A joint account can be opened with anyone aged 60 or older, or with a spouse.
Regarding the age limit, there are exemptions in some cases. The age of the person taking VRS can be more than 55 years and less than 60 years at the time of opening the account, whereas retired defence employees can invest at the age of more than 50 years and less than 60 years.
5-year maturity period, closing the account before that is expensive
The maturity period for investments in the Post Office Senior Citizen Scheme is five years, meaning you must invest for five years to reap the full benefits of this scheme. However, if the account is closed before this period, the account holder is required to pay a penalty as per the rules. This government scheme provides for payment of interest on investments every three months. If the account holder dies before the maturity period, the account is closed and the entire amount is transferred to the nominee named in the documents.
How to earn Rs 20,500 per month?
You can easily open an SCSS account at any nearby post office. The maximum investment allowed is Rs 1.5 million from a single account and Rs 3 million from a joint account.
If a person invests Rs 3 million in a Post Office SCSS joint account, they will receive Rs 61,500 in interest-only interest on a quarterly basis for five years. After five years, you can withdraw the principal amount of Rs 3 million or extend it for another three years. Calculating this on a monthly basis…
Annual interest earnings: 8.2% of ₹30,00,000 = ₹2,46,000
Quarterly interest earnings: ₹2,46,000/4 = ₹61,500
Monthly interest earnings: ₹2,46,000/3 = ₹20,500
It’s worth noting that once you invest, the same interest rate remains applicable for the entire maturity period, even if the government changes the interest rates later as per quarterly revisions.
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