Post Office Scheme : For most people, one of the biggest concerns after retirement is how they will manage their expenses. Once you retire, your regular income comes to an end, which can make life financially challenging. In such a situation, it is important to have a reliable source of regular income. Today, we are going to tell you about a scheme that can help you earn a steady income even after retirement. We are talking about the Post Office Senior Citizen Savings Scheme (SCSS), which is one of the highest-return schemes offered by the Post Office. Let’s understand it in detail.
What is the interest rate in Post Office SCSS?
Currently, the Post Office Senior Citizen Savings Scheme is offering an annual interest rate of 8.2%. Under this scheme, you have to deposit a lump sum amount, and in return, you will receive interest every three months. As the name suggests, this scheme is specially designed for senior citizens.
Who can open an account under Post Office SCSS?
Any person who is 60 years of age or above can open an account under this scheme. Apart from this, some age relaxations are available for those who have taken voluntary retirement (VRS):
- Civil sector employees aged between 55 and 60 years can open an account within one month of receiving their retirement benefits.
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Defense sector personnel aged between 50 and 60 years are also eligible for this scheme.
In addition, a joint account can also be opened in the name of husband and wife.
How much can you invest in Post Office SCSS?
- The minimum investment amount is ₹1,000.
- The maximum investment limit is ₹30 lakh.
- Investment has to be made only once (lump sum).
- After that, interest is paid every three months.
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Investments made under this scheme are eligible for tax benefits under Section 80C of the Income Tax Act. However, the interest earned is taxable.
Maturity period of Post Office SCSS
The maturity period of this scheme is 5 years. You can further extend it by 3 years by submitting an application at the post office.
Regarding premature closure:
- If the account is closed before 1 year, no interest will be paid, and any interest already paid will be recovered from the principal.
- If closed after 1 year but before 2 years, 1.5% of the principal will be deducted.
- If closed after 2 years but before 5 years, 1% of the principal will be deducted.
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An extended account can be closed any time after 1 year without any penalty.
How much return will you get by investing ₹22 lakh with your wife?
You and your wife can jointly invest in this scheme by opening two separate accounts. You can each invest ₹11,00,000, making the total investment ₹22,00,000. If your wife has also been working, arranging this amount by retirement becomes easier.
On a total investment of ₹22 lakh, you will receive ₹45,100 as interest every three months, which is approximately ₹15,000 per month. This regular income can help you manage your daily and small household expenses comfortably even after retirement. After 5 years, you will get back your full principal amount of ₹22,00,000.
Investment Summary
| Details | Information |
|---|---|
| Investment per person | ₹11,00,000 |
| Total lump sum investment | ₹22,00,000 |
| Scheme duration | 5 years |
| Quarterly interest income | ₹45,100 |
| Average monthly income | Approx. ₹15,000 |
| Total interest in 5 years | ₹9,02,000 |
| Principal returned at maturity | ₹22,00,000 |
You can choose to reinvest this principal again in SCSS or put it into another regular income scheme after maturity. Over a period of 5 years, you will earn a total interest of ₹9,02,000, which can significantly support your post-retirement financial needs.