Get 19 Lakhs 68 Thousand Rupees (1968000) in 8 years and 12 Lakhs 30 Thousand (1230000) rupees from Post Office scheme in just 5 Years. Click on it to know and explore full details about the lifeline for senior citizens
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Get 19 Lakhs 68 Thousand (1968000) Rupees in 8 years and 12 Lakhs 30 Thousand (1230000) rupees from Post Office scheme in just 5 Years. Get to know and explore full details about the lifeline for senior citizens
As human beings, we need social and financial security always when we stay in this world.
So, think of a person who has already served his/her 30-35-40 years in doing job or some sort of business, don't you think that person should have some kind of financial security after crossing the age of 60?
Moreover at this age, you shouldn't start investing in any volatile products as Mutual Fund, Bond, stocks, etc. though you can (based on risk appetite). This is the time, you need to secure your earnings so that you can do with it whatever you want or it can grow when it is idle.
Even if you are an employee, and taking retirement, then you should securely invest your retirement amount instead of investing it in any random products.. So, financial security or monetary security turns into a significant concern for senior citizens.
So, Who is a Senior Citizen:
Any individual above 60 years of age is normally considered as Senior Citizen.
Out of various investment options, today we are going to talk about the scheme which is totally dedicate to the senior citizens of India and that is: Senior Citizen Saving Scheme (SCSS) offered by the post office / senior citizen savings scheme (scss) at post offices. In our last article, we discussed about Monthly Savings Scheme for citizens, where as this SCSS is only for senior citizens.
One of the major benefits of the scheme is that it does not only grow over the time, but it also lets you earn a regular income during your retirement. Let's delve into the features and benefits and also understand the reason of becoming a lifeline for senior citizens.
Key Features and Benefits:
- Attractive Interest Rates: The SCSS scheme currently offers one of the highest interest rates among fixed income investment options. The interest is payable quarterly and is subject to change as per that time market conditions. This ensures that senior citizens earn a steady income stream to support their monetary requirements.
- Secure Investment: Since this scheme is backed by the Government of India, it make post office senior citizen savings scheme (scss) a safe and secure investment option. With a low-risk profile, senior citizens can have peace of mind knowing that their hard-earned money is in the safe hands.
- Flexible Investment Amount: Individuals can invest a minimum of Rs. 1,000 and maximum limit up to Rs. 30 lakhs in all SCSS accounts opened by that individual. This flexibility allows seniors to choose an investment amount that aligns with their financial goals and resources.
- Tenure and Renewal: The Senior Citizen Saving Scheme has a maturity period of 5 years, which can be extended by an additional 3 years upon maturity by submitting prescribed form with passbook at concerned post office within 1 year of maturity. This extension provides senior citizens with continued financial stability and the option to reinvest the funds for longer duration.
- Tax Benefits: Deposits made under the SCSS are eligible for tax benefits under Section 80C of the Income Tax Act, 1961, up to a maximum limit of Rs. 1.5 lakh. This provision allows senior citizens to save on their tax liabilities while building a retirement corpus.
Interest is taxable if total interest in all SCSS accounts exceeds Rs.50,000/- in a financial year and TDS at the prescribed rate shall be deducted from the total interest paid. No TDS will be deducted if form 15 G/15H is submitted and accrued interest is not above prescribed limit.
- Accessibility and Convenience: One of the key advantages of the SCSS is its widespread availability through post offices across the country. This makes it easily accessible to senior citizens, even in remote areas. The simple application process and minimal documentation requirements further add to the convenience factor.
Interest rate is 8.2 % per annum for senior citizen savings scheme (scss) account.
How to Earn Interest of 19 Lakhs 68 Thousand Rupees (1968000) and 12 Lakhs 30 Thousand (1230000) rupees?
Let's see 2-3 scenarios to understand how much you can invest and what will be your quarterly income.
Scenario#1
Suppose your age is 60 years and you just now retired from your service. You received around 50 Lakhs (including all your retiree benefits) and you don't have any pension coming in in future.
Then if you invest 30 lakhs in SCSS account in post office for 5 years with interest amount as 8.2%, then you will get ₹42,30,000 rupees as maturity amount and ₹12,30,000 as total interest amount. Meaning you will get ₹61,500 rupees every quarter (meaning 20500 rupees per month).
Scenario #2:
Suppose your age is 60 years and you just now retired from your service. You received around 20 Lakhs (including all your retiral benefits) and you don't have any pension coming in in future.
Then if you invest 15 lakhs in SCSS account in post office for 5 years with interest amount as 8.2%, then you will get ₹21,15,000 rupees as maturity amount and ₹6,15,000 as total interest amount. Meaning you will get ₹30,750 rupees every quarter (meaning 10250 rupees per month).
Scenario #3:
Suppose your age is 60 years and you just now retired from your service. You received around 15 Lakhs (including all your retiral benefits) and you don't have any pension coming in in future.
Then if you invest 10 lakhs in SCSS account in post office for 5 years with interest amount as 8.2%, then you will get ₹14,10,000 rupees as maturity amount and ₹4,10,000 as total interest amount. Meaning you will get ₹20,500 rupees every quarter (meaning 6833.33 rupees per month).
Calculation Summary in below table for 5 years:
You got the scenarios right.
- Now if you would continue this for another 3 years (meaning total 8 years), then you will earn ₹1968000 rupees as interest income when investing 30 lakhs rupees.
- If you invest 15 lakhs rupees, then you will receive total ₹984000 rupees as interest amount .
- And if you would invest 10 lakhs rupees, then you would receive total ₹656000 as interest amount.
Calculation Summary in below table for 8 years:
Who Can open the Account?
(i) If you are above 60 years of age.
(ii) If you are a retired Civilian Employees above 55 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits.
(iii) If you are a retired Defense Employees above 50 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits.
(iv) You can open the account individually or jointly with spouse only.
(v) The whole amount of deposit in a joint account shall be attributable to the first account holder only.
How much of Interest and its process?
(i) Interest to be paid on quarterly basis and applicable from the date of deposit to 31st March/30th June/30th September/31st December (quarter-end).
(ii) You have to claim the interest earned every quarter else such interest shall not earn additional interest in your SCSS account.
(iii) You can withdraw your earned through auto credit into savings account standing at same post office, or ECS. In case of SCSS account at CBS Post offices, monthly interest can be credited into savings account standing at any CBS Post Offices.
You can use any senior citizen savings scheme (scss) calculator available online to check and confirm on the interest calculation as well.
What is the Premature Closure process:-
(i) Account can be prematurely closed any time after date of opening.
(ii) If account closed before 1 year, no interest will be payable and if any interest paid in account shall be recovered from principle.
(iii) If account closed after 1 year but before 2 year from the date of opening, an amount equal to 1.5 % will be deducted from principal amount.
(iv) If account closed after 2 year but before 5 year from the date of opening, an amount equal to 1 % will be deducted from principal amount.
(v) Extended account can be closed after the expiry of one year from the date of extension of the account without any deduction.
What is the Maturity Process on account closure:
Conclusion:
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