SCSS: If you have received funds from elsewhere and want to invest them in the right place to generate regular income, consider this government scheme. The Post Office Senior Citizens Savings Scheme is a good option.
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Senior Citizen Savings Scheme: If you have received funds from elsewhere and want to invest them in the right place to generate regular income, consider this government scheme. The Post Office’s Senior Citizens Savings Scheme (SCSS) is a great option. While this scheme is specifically for senior citizens, you can also take advantage of the high interest rates by opening an account in your parents’ name. This Post Office scheme is one of the highest-interest government schemes. Investing in this scheme can provide regular income along with tax benefits.
The Senior Citizens Savings Scheme offers an annual interest rate of 8.2%. This interest is credited to the account every three months. Note that interest is not earned on the interest, but only on the principal. The maturity period for this scheme is five years, but it can be extended any number of times for five years. It can be opened at any Post Office Savings branch. Senior citizens can make lump sum investments in this scheme individually or jointly. If two separate accounts are opened in the same household, the maximum deposit can be made in both.
Government Scheme Deposit Rules
The Senior Citizens Savings Scheme allows for a minimum investment of ₹1,000. The maximum investment limit is ₹30,00,000. If you open two separate accounts with your spouse, you can deposit a combined total of ₹60 lakh in both accounts.
This scheme also offers tax benefits under Section 80C of the Income Tax Act for investments up to ₹1.5 lakh. The Post Office Small Savings Scheme is backed by a sovereign government guarantee, so there are no concerns about safety and returns.
SCSS: Earn Rs 2,40,600 in interest every year
The maximum deposit limit in the Post Office Senior Citizens Savings Scheme is Rs 30 lakh. The interest rate under this scheme is 8.2% per annum, and its maturity period is 5 years.
Maximum deposit: Rs 30 lakh
Interest rate: 8.2% per annum
Maturity period: 5 years
Monthly interest: Rs 20,050
Quarterly interest: Rs 60,150
Annual interest: Rs 2,40,600
Total interest in 5 years: Rs 12,03,000
How much loss is incurred if you make a premature withdrawal?
Closing an SCSS account before the 5-year lock-in period is subject to a penalty. This penalty depends on the length of the account opening period.
If the account is closed before one year, no interest is paid on the deposit. If interest has already been paid, it will be deducted from the principal amount.
If the account is closed after one year but before two years, 1.5% of the balance in the account is deducted at the time of withdrawal.
If the account is closed after 2 years but before 5 years, 1% of the principal amount is deducted.
If your SCSS account is an extended account, there will be no penalty if the account is closed after one year of extension.
