Why SCSS is Best for Retired Person : Senior Citizens Savings Scheme (SCSS) is considered to be the best investment scheme for senior citizens or retired people. Many people will have this thought in their mind that if the interest rate on this scheme is 8.2 percent then the value of investment on maturity will be higher than that of Fixed Deposit (FD). The interest rate on Post Office’s 5-year time deposit scheme i.e. FD is 7.50 percent. Whereas in SBI, senior citizens are getting 7.50 percent interest on 5 year FD. But you are wrong. In most FD schemes, the amount received on maturity is more than that of SCSS. Still, why is SCSS a better option?
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SCSS: How much amount will be received on maturity
One Time Investment: Rs 10 lakh
Interest rate: 8.2% per annum
Maturity period: 5 years
Quarterly interest: Rs 20,500
Total interest in 5 years: Rs 4,10,000
Total returns: Rs 14,10,000 lakh
FD: How much amount will be received on maturity
One Time Investment: Rs 10 lakh
Interest rate: 7.50% per annum
Maturity period: 5 years
Total interest in 5 years: Rs 4,35,629
Total returns: Rs 14,35,629 lakh
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where is the greater benefit
It is clear from the calculation that if senior citizens do not claim quarterly interest in the savings scheme, then the total amount on maturity on an investment of Rs 10 lakh will be Rs 14,10,000 lakh. Whereas on investment of Rs 10 lakh in FD, the total amount on maturity will be Rs 14,35,629 lakh. In fact, further interest is added on the interest on FD every year. Whereas in Senior Citizens Savings Scheme, no further interest is available on quarterly interest. Interest is available only on the principal amount.
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Why SCSS is best for senior citizens
Despite the lower amount on maturity, Senior Citizens Savings Scheme is considered better than fixed deposits. The main reason behind this is that it provides an opportunity for regular income even after retirement. Senior citizens can invest in this scheme once and earn interest income every 3 months. Whereas this facility is not available in FD. Once money is locked in FD, its benefits will be available only after maturity. Under the Senior Citizens Savings Scheme, two different members of a household can open separate accounts. In such a situation, the income coming into that house will also double.
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How much will be the regular income from SCSS?
If you invest maximum limit of Rs 30 lakh in this scheme, then Rs 61,500 will come into your account every 3 months. Which will be Rs 20500 monthly and Rs 2,46,000 annually.
Maximum deposit: Rs 30 lakh
Interest rate: 8.2 percent per annum
Maturity period: 5 years
Quarterly interest: Rs 60,150
Annual interest: Rs 2,40,600
Total interest in 5 years: Rs 12,03,000
Total returns: Rs 42,03,000 lakh
SCSS: If there are 2 separate accounts in one household
Maximum deposit: Rs 60 lakh
Interest rate: 8.2 percent per annum
Maturity period: 5 years
Quarterly interest: Rs 1,20,300
Annual interest: Rs 4,81,200
Total interest in 5 years: 24,06,000
Total returns: Rs 84,06,000 lakh
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Highest Safety, High Returns and Tax Savings
Senior Citizens Savings Scheme has been specially designed keeping senior citizens in mind, which provides the opportunity of regular income along with highest safety, high returns and tax savings benefits. This scheme can also be used for regular income after retirement. Senior citizens living in India can invest a lump sum in this scheme individually or jointly and earn high returns along with tax benefits. The maturity period of this scheme is 5 years and interest is being given at the rate of 8.2 percent per annum (quarterly compounding).
(source: india post, scss calculator, fd calculator)
