Post Office SCSS is the initiative that helps people, specifically the older people, achieve safe investments offering regular returns along with excellent interest. There is one more advantage, in contrast to all the saving schemes; its annual rate is 8.2% only. This interest and features have created significant space for it.
Some important features of SCSS
Eligibility: Those above 60 years of age are eligible to invest under SCSS. Besides that, those who have gone for Voluntary Retirement Scheme (VRS) within the age group of 55 to 60 can also invest under SCSS subject to certain conditions.
Investment Limits: A minimum deposit of ₹1,000 is possible. The maximum investment shall be ₹30 lakh and the deposits should be made in multiples of ₹1,000.
Maturity Period: The scheme has a 5-year tenure, which may be extended for another 3 years after maturity. Withdrawal before maturity is allowed but may be liable to some penalty.
Earning Potential
Investment of the maximum permissible ₹30 lakh will yield excellent returns. At an annual interest rate of 8.2%, the interest amount works out to be ₹2.46 lakh per annum, which equates to a monthly income of about ₹20,500.
Tax Benefits
SCSS investments are tax-exempted up to ₹1.5 lakh under Section 80C of the Income Tax Act. Interest earned is, however, taxable and attracts TDS if it crosses ₹50,000 in a financial year. One can save TDS deductions if he submits Form 15G or 15H, provided he meets all the eligibility criteria.
Bank Fixed Deposits
SCSS offers a higher rate of interest than that of traditional bank fixed deposits, which range between 7% and 7.75% for the same tenures. For example, State Bank of India offers 7.5% per annum on a 5-year fixed deposit for senior citizens.
How to Invest
To invest in SCSS, one can approach any post office or any authorized bank branch. This requires the submission of application forms and necessary documents, such as proof of age and identity.
Conclusion
The Post Office Senior Citizen Savings Scheme is a safe and promising investment avenue for the elderly seeking regular income along with the safety of government-guaranteed assurance. With attractive interest rates, tax benefits, and flexibility, it has become one of the preferred choices for post-retirement financial planning.
