Senior Citizens Savings Scheme Update: The Post Office’s Senior Citizens Savings Scheme (SCSS) is a great option for senior citizens looking for a safe investment with guaranteed returns. This scheme offers an annual interest rate of 8.2%, which is deposited into your account every quarter. With proper planning, you can also use this scheme to generate a regular monthly income. Let’s understand how the SCSS scheme works and how much money you can receive from it every month.

What is Special About the SCSS Scheme?

The Senior Citizens Savings Scheme (SCSS) is a government-backed savings scheme that provides safe and fixed returns for senior citizens. This scheme can be opened in both authorized banks and post offices. The government guarantees the investment, ensuring it is risk-free.

Features of the SCSS Account

  • Investment Period: 5 years (with an option to extend for 3 more years)
  • Interest Rate: 8.2% per annum (interest paid every 3 months)
  • Minimum Investment: Rs 1,000
  • Maximum Investment: Rs 30 lakh
  • Tax Benefits: Tax exemption on investment up to Rs 1.5 lakh under Section 80C
  • Nomination Facility: Available

Who Can Open an SCSS Account?

  1. Senior citizens aged 60 or above.
  2. Retired government employees aged 55-60 years under the Voluntary Retirement Scheme (VRS).
  3. Retired defense personnel aged 50 or more, who invest the amount within 1 month of receiving retirement benefits.
  4. HUFs and NRIs are not eligible to open an account.

How Many Accounts Can Be Opened in the SCSS Scheme?

You can deposit a maximum of Rs 30 lakh in a single SCSS account. If you open a joint account with your spouse, the maximum combined deposit can be Rs 60 lakh. The scheme is for 5 years, but it can be extended for an additional 3 years.

Monthly Income Potential in SCSS

Interest is paid quarterly in the SCSS scheme. If you want a monthly income, you can manage the withdrawal of interest accordingly.

The calculation for Maximum Investment of Rs 30 Lakh:

  1. Invested Amount: Rs 30 lakh
  2. Annual Interest Rate: 8.2%
  3. Quarterly Payment of Interest: Rs 60,150
  4. Monthly Income: Rs 20,050

Thus, if you invest Rs 30 lakh, you will earn a total interest of Rs 12.03 lakh over 5 years. If both husband and wife open separate SCSS accounts, they can invest Rs 30 lakh each, increasing their combined monthly income to Rs 40,100.

Can an SCSS Account Be Closed Before Maturity?

Yes, you can close your SCSS account before maturity, but certain conditions apply:

  1. Before 1 year: No interest will be given. If any interest has already been paid, it will be deducted from the principal amount.
  2. Between 1 to 2 years: A penalty of 1.5% of the deposited amount will be deducted.
  3. Between 2 to 5 years: A penalty of 1% of the deposited amount will be deducted.
  4. After 5 years (extended account): No penalty will be charged if the account is closed after 1 year of extension.

How to Use SCSS for Maximum Benefit?

  • SCSS provides quarterly interest, which can be withdrawn every month as a regular income.
  • By opening separate SCSS accounts in the name of both husband and wife, the monthly income can be doubled.
  • After maturity, reinvesting the principal amount in SCSS can help ensure a steady income.
  • Combining SCSS with other savings schemes like the Public Provident Fund (PPF) or Fixed Deposit (FD) can give better long-term returns.

Why Choose SCSS?

The Senior Citizens Savings Scheme (SCSS) is one of the best options for retirees looking for regular income. With an annual interest rate of 8.2%, it remains one of the most attractive savings schemes for senior citizens.