Senior Citizens Savings Scheme (SCSS): Planning for a secure and steady income after retirement is a priority for many. The Senior Citizens Savings Scheme (SCSS) offers retirees a reliable way to invest their funds while ensuring regular quarterly returns.
Backed by the government, this scheme provides one of the highest interest rates among small savings options, making it an attractive choice for retirees looking to maximize their savings.
With an 8.2% annual interest rate, SCSS enables senior citizens to safeguard their retirement corpus while generating consistent income. Here’s a closer look at how the scheme works and the potential benefits it offers.
How the SCSS works:
Senior citizens can open an SCSS account individually or jointly with their spouse. The scheme allows a maximum deposit of ₹30 lakh per account, with a minimum investment of ₹1,000. Deposits up to ₹1 lakh can be made in cash, while amounts exceeding ₹1 lakh require payment by cheque.
Dual accounts, double benefits:
Retired couples can maximize returns by opening separate SCSS accounts, effectively doubling their investment limit to ₹60 lakh. This allows for a combined quarterly interest of ₹1,20,300 and an annual income of ₹4,81,200. Over the five-year maturity period, this can generate a total interest of ₹24,06,000.
Key benefits:
- High returns: SCSS offers an annual interest rate of 8.2%, making it the highest-paying small savings scheme alongside the Sukanya Samriddhi Yojana.
- Tax advantages: Deposits qualify for tax benefits under Section 80C of the Income Tax Act, providing additional savings for account holders.
- Full safety: Backed by the government, the scheme ensures 100% security of the deposited amount.
Example calculation:
For a single account with a maximum deposit of ₹30 lakh:
- Quarterly interest: ₹60,150
- Annual interest: ₹2,40,600
- Total interest over five years: ₹12,03,000
- Total maturity amount: ₹42,03,000
The Senior Citizens Savings Scheme is an ideal choice for those seeking stable post-retirement income and financial security. With the option to renew after the five-year maturity period, it remains a reliable tool to safeguard your financial future.