Senior Citizens Savings Scheme Account (SCSS): Senior citizen needs some regular source of income as they grow old. It helps them meet regular expenses or assist medical needs.
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The requirement of regular source of income is felt more when senior citizens are on their own and don’t have someone to financially meet their needs. One of the best solutions to meet these expenses are pension of savings schemes where they can invest one-time and get returns in the form of interest. Since such income is fixed depending on one’s investment, senior citizens can adjust their lifestyle according to their income from investments.
More often, such investment schemes are non-market-linked, where senior citizens get guaranteed returns in the form of interest.
Senior Citizens Savings Scheme Account (SCSS), which is a post small savings scheme and is also run by a lot banks, in one such guaranteed return scheme, where senior citizens can invest one-time and get quarterly pension for five years in a row.
At maturity of the scheme, they get their principal amount back.
One can get a yearly income of Rs 2,46,000 by investing in this scheme.
Know the basic features of the scheme and how you can earn up to Rs 2,46,000 in this scheme.
Senior Citizens Savings Scheme Account (SCSS) basic features
The scheme provides an annual interest rate of 8.20 per cent, which is the second-best among all post office schemes after Sukanya Samriddhi Yojana (SSY).
Senior citizens above 60 years of age, retired civilian employees above 55 years of age and below 60 years of age and retired defense employees above 50 years of age and below 60 years of age can apply for this scheme.
The minimum one-time investment in SCSS is Rs 1,000 and in the multiples of Rs 1,000 and the maximum is Rs 30 lakh.
Investments in SCSS qualifies for tax exemption of up to Rs 1.50 lakh under Section 80C of the Income Tax Act, 1961.
How SCSS works
One makes a one-time investment in the scheme and the interest is payable on a quarterly basis and applicable from the date of deposit to March 31/June 30/September 30/December 31.
An important thing to consider is 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, as per the post office website.
One can prematurely closed the SCSS account or can extend it for 3 years from the date of maturity.
How to get Rs 2,46,000 a year through SCSS
For that, one need to make a one-time investment of Rs 30 lakh in the scheme. At the rate of 8.2 per cent interest rate, one will get quarterly interest of Rs 61,500 in a quarter.
In four quarters or a complete year, one will get Rs 2,46,000.
If one continues for the full five years, they will get Rs 12 lakh return on their initial investment of Rs 30 lakh.
