Senior Citizens Savings Scheme, as the name suggests, is meant for senior citizens who usually look for places to keep their savings safe post-retirement, meanwhile earning a moderate rate of return on those savings.
Other than the Senior Citizens’ Savings Scheme (SCSS), further investment options such as post-office FDs and RDs, National Pension System (NPS), bank FDs and RDs, mutual funds, Pradhan Mantri Vaya Vandana Yojana (PMVVY), etc. are some of the additional investment options for senior citizens. With some of these options, senior citizens can get personalized services along with higher interest rates, which are specially offered to senior citizens.
Here are certain benefits of the Senior Citizens Savings Scheme that you should know;
The Senior Citizens Savings Scheme (SCSS), however, offers regular income along with tax-saving benefits, with the highest form of safety. Other investment options like mutual funds, even though they offer relatively high-risk and high-return funds, according to experts low-risk fixed return investment options like fixed deposits (bank and post-office), PMVVY and SCSS are also needed in a portfolio.
The ideal portfolio of an individual totally depends on his/her needs. To get the best return along with wealth creation, any investor should have the combination of both high-risk high-return funds, along with low-risk fixed return investment options in their portfolio.
SCSS is a government-backed savings scheme and is known to be more secure, unlike bank FDs, as in this case the investments are held with the government. This investment option comes with a tenure of 5 years, which can be extended by 3 years.
SCSS is a long-term saving option that offers added features usually associated with any government-sponsored investment or savings scheme. Investors can invest up to Rs 15 lakh, both individually and jointly, in an SCSS account. However, the account needs to be opened within one month of receipt of retirement benefits, and the amount invested cannot exceed the money that has been received on retirement.
SCSS account can be open by investors at any India Post Offices, and the interest earned from the account is credited to the investor’s linked savings account, in the same post office. Additionally, both public and private sector banks also offer the opening of the SCSS account to its customers.
In a year investment up to Rs 1.5 lakh in this account is exempted from tax, and the interest rate which is taxable currently stands at 8.6 per cent.
