Post Office Scheme / You get more interest in this scheme of Post Office, take advantage like this

Post Office Scheme: Making life financially secure and stress-free after retirement is the priority of every elderly. In such a situation, the government-run Post Office Senior Citizen Savings Scheme (SCSS) comes out as a reliable and attractive investment option. This scheme is specially designed for people of 60 years of age or above, which not only provides good interest but also reduces the financial burden through tax exemption. Let us understand the features, benefits and conditions of this scheme in detail.

Who can invest?

The following people can invest in SCSS:

Indian citizens aged 60 years or above.

Government employees aged 55-60 years, who have taken voluntary retirement (VRS).

Defense personnel aged 50-60 years, who fulfill certain special conditions.

Apart from single account, this scheme also provides the facility of opening a joint account in the name of husband and wife, so that the couple can manage their investment together.

Investment limit and interest rate

The minimum amount of investment in SCSS is Rs 1,000, while the maximum limit is up to Rs 30 lakh. Earlier this limit was Rs 15 lakh, which has recently been doubled. This scheme offers an attractive annual interest rate of 8.2%, which is much better than the fixed deposits (FD) of banks. Interest is paid on a quarterly basis, providing regular income to investors.

For example, if a person invests Rs 30 lakh, he will get an interest of Rs 2.46 lakh annually, which is equivalent to about Rs 20,500 on a monthly basis. This amount can contribute significantly to meeting regular expenses after retirement.

Tax exemption benefits

Investment in SCSS is not only a source of regular income, but it also helps in tax savings. Under Section 80C of the Income Tax Act, tax exemption of up to Rs 1.5 lakh can be availed on the amount invested in this scheme. This feature makes it even more financially beneficial for the elderly.

Scheme Tenure and Withdrawal Conditions

• The normal tenure of SCSS is 5 years, but it can be extended by another 3 years if needed. If an investor wishes to withdraw his money prematurely, the following conditions apply:
• No interest is paid if the account is closed before 1 year.
• 1.5% interest deduction if the account is closed between 1-2 years.
• 1% interest deduction if the account is closed between 2-5 years.
• This flexibility allows investors to access their funds in an emergency, although some penalty applies on premature withdrawal.

Why is SCSS special?

• Safe Investment: It is a government scheme that guarantees risk-free investments.
• Attractive Interest Rate: The interest rate of 8.2% is much better than other investment options.
• Regular Income: Quarterly interest payments make it easier to meet regular expenses after retirement.
• Tax savings: Tax exemption under section 80C makes the investment more attractive.
• Flexibility: Joint account and extension facility make it more useful.