Senior Citizens Savings Scheme of the post office is a better option for senior citizens. It gives better returns. You can open an account with only 1000 in it, while the maximum investment limit is 15 lakhs.
Having an income after retirement can cause financial problems, but to overcome it, senior citizens can invest in the Senior Citizens Savings Scheme of the Post Office. In this, they can get up to Rs 14 lakh in just 5 years. In this scheme, people of 60 years of age or above can open an account. At present, interest is being given in it at the rate of 7.4 percent per annum.
The maturity period of Senior Citizens Savings Scheme (SCSS) is of 5 years, however, if you wish, you can extend this time limit for another 3 years after maturity. For this you have to apply in the post office. The minimum amount to open an account in this scheme is Rs 1000. While the maximum is Rs 15 lakh. If the amount is less than one lakh rupees, then you can open an account by paying cash. At the same time, to open an account for more than one lakh rupees, you will have to pay a check.
Benefits of the scheme
1. Under SCSS, a depositor can open more than one account either singly or jointly with someone. But taking all these together the maximum investment limit should not exceed 15 lakhs.
2. Investment in this scheme is exempted under section 80C of the Income Tax Act. However, if the interest amount exceeds Rs 10,000 per annum, your TDS starts deducting.
3. It also allows for premature closure. If you want, you can withdraw money before maturity by giving valid reasons. However, you should have one year to open the account. During this 1.5 percent of the deposit will be deducted, while after 2 years, 1 percent of the deposit will be deducted.
How to get 14 lakhs
Investors are getting interest at the rate of 7.4 percent in the Senior Citizens Savings Scheme of the Post Office. If you invest a lump sum of Rs 10 lakh in the scheme, then after 5 years at the rate of interest of 7.4 percent (compounding) per annum, the total amount to the investors on maturity will be Rs 14,28,964 i.e. more than Rs 14 lakh. Here you will get the benefit of Rs 4,28,964 as interest.
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