The senior citizens over 60 years old are generally able to consider investments such as bank fds, national pension system (NPS), Pradhan Mantri Vaya Vandana Yojana (PMVVY), and Senior Citizens' Savings Scheme (SCSS). In order to earn a moderate return senior citizens over 60 years always consider among those investment tools to cherish their retirement life. Although these are the top choices for senior citizens, together with mutual funds, some investments provide personalised services and higher interest rates to the senior citizens.
Senior Citizens Savings Scheme provides regular income and tax-saving benefits for senior citizens. While high returns options such as mutual funds also come with high risk, senior citizens must keep low-risk fixed-return investment options in their portfolio such as post office FDs, PMVVY, bank FDs and SCSS as suggested by the experts. As this blend strategy of maintaining high-return funds along with low-risk fixed return investment options will help you for wealth creation as well as generate good return.
1. In addition, the government-backed Senior Citizens Savings Scheme is considered as the more secure, as the investments are held with the government, unlike mutual funds or FDs. An investor can make contributions for up to a tenure of 5 years, which further can be extended to additional three years.
2. Both joint and single account holders can invest up to a upper limit of Rs 15 lakh, starting with a minimum lump-sum amount of Rs.1000. Hence, an investor is also eligible for income tax deduction benefit up to Rs. 1.5 Lakh under Section 80C of the Income Tax Act, 1961, for the investment made in the SCSS account.
3. Currently, a senior citizen will get an interest rate of 7.4 per cent per annum on SCSS which is calculated and credited quarterly. The Ministry of Finance evaluates this interest rate quarterly and the interest rate is modified periodically.
4. In SCSS premature withdrawal is permitted but a penalty will be charged at 1.5 per cent of the deposit amount in case an investor exit from the scheme before the completion of two years from the date of account issuance. And similarly 1% penalty will be charged if the exit occurs within 2 years and less than 5 years from the date of account opening.
5. The SCSS account will be closed and all maturity profits will be transferred to the legitimate heir / nominee in case of death of the primary account holder. For case of death claims, the nominee or legal heir will be required to fill out a written request in the prescribed application form along with Death Certificate in order to undertake the account closure procedure.