Nobody knows the importance of securing their retirement life financially more than senior citizens. The reason being that, in old-age certain sudden and high-end expenditures especially related to medical expenses may crop up. Along with this is the will to be financially independent. This is where the Senior Citizen Saving Scheme (SCSS) and other investment options become important.
Before dwelling on the SCSS and other options, it is imperative to briefly cover what is investment. Investment is the process of putting your funds away with the intention of receiving returns on a rate of interest on them. This can be by giving a simple loan, diversifying it into the market or making fixed deposits. People often prefer social security schemes, which brings us to the SCSS.
The government launched the Senior Citizen Saving Scheme (SCSS) in 2004. The aim of launching this scheme was to meet the challenges that came with nuclear families. After inheritance procedures were completed, senior citizens were often sent off to Old Age Homes. While this happens presently as well, now, they have an option to secure their finances with this scheme.
The scheme provides them with a regular flow of income to meet recurring and basic expenses. It provides for interest payment on a quarterly basis. However, since it is a government scheme; the interest rates are adjusted in accordance with needs of the retirees.
Eligibility Criteria
- The scheme is only for citizens of India, any persons that are non-residents do not qualify (Non-residential Indians, Overseas Citizens of India, Persons of Indian Origin) and the Hindu Undivided Families (HUFs) also are not eligible
- Senior citizens as defined in the Indian context include individuals who are 60 years of age or more, so they are eligible but there are some exceptions too:
- Candidates in the age bracket of 55-60 years who have opted for Voluntary Retirement Scheme or Superannuation are eligible as long as they apply within a month of receiving their retirement perks
- Defence Personnel can avail this scheme irrespective of age provided they fulfil other conditions
- The minimum deposit for the scheme is Rs 1000
Benefits of the Scheme
- Being a government scheme, the SCSS offers a number of benefits like:
- It offers a reasonable rate of return on the investment made
- It is very easy to open, operate or transfer it at any authorized bank or post office
- It offers flexibility to an extent of one extension of 3 years after the maximum permissible period of 5 years has elapsed
Interest Rates and Calculation
Users can use the Bajaj FD Interest Calculator and see the highest FD rates. They can also use this to ascertain the efficacy of the SCSS and make prudent decisions for the future. The same details as for FD calculation will be required for SCSS’s future’s computation. These include:
- Interest Rates
- Time Period
- Contribution per month
Thus, it is rather simple to use the calculator and you can easily go to Bajaj Finance’s website for any further doubts on the same. Additionally, as a Senior Citizen the company offers you an additional interest rate of 0.25% making your net rate 6.75%. Added to this is the benefit of untimely withdrawals, keeping in mind the need for money in old age.
Investments are a huge part of money management. Even the best of investors like Warren Buffet, being 90 years old, still display a lot of prudence and give a lot of importance to parking your funds at the right avenue. If one of the world’s biggest business magnates can do it, then any user at just 60 or above must for sure invest. Bajaj Finance remains the best option for a safe retirement life for you.
Senior Citizens Savings Scheme
(SCSS) is a senior citizen saving scheme of the government that pays 7.40 percent per year at the moment. This is a retirement benefits scheme where senior citizens can park their life savings with the assurance of negligible risk. The maximum amount that can be invested in SCSS is Rs. 15 lakh. SCSS is a good option for retirees who want a high fixed rate of return and a quarterly income. The investors in this scheme are eligible to claim exemption under Section 80 C the Income-tax Act, 1961 for an amount up to 150000. This is an ideal scheme to take advantage of the Senior citizen interest rates.
The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a combined retirement and pension program for old adults. Life Insurance Corporation is in charge of the scheme’s operation and management. The PMVVY program has been extended through March 31, 2023. Currently, the system offers a special Senior citizen interest rate of 7.40 percent in the annually guaranteed pension that is paid monthly. The PMVVY appears to be an attractive scheme for elders. It is safer than small financing institutions because it is backed by the LIC and the government. You can also acquire guaranteed pension benefits for the next ten years without having to worry about rate changes.
Bank fixed deposits have traditionally been a popular alternative for most senior individuals. Bank FDs pay interest on a monthly, quarterly, half-yearly, or annual basis. Some banks, including SBI, ICICI Bank, and HDFC Bank, provide older citizens special deposits on deposits of five years or more. These special FDs are valid till June 30, 2021. The majority of Small Finance Banks are offering FD Senior citizen interest rates over 7 percent for senior citizens.
The Post Office Monthly Income Scheme (POMIS) has a 5-year term and the interest rate remains constant until the maturity date. The interest rate is currently 6.6 percent per annum for the quarter ending June 2021.
Assured fixed monthly income on a lump sum principal is what the senior citizen looks forward to. Mostly the principal comprises retirement benefits which are lifetime savings. Hence such investments should be made with a lot of care. The Senior Citizens Savings Scheme appears to be an ideal choice for the elderly taking into consideration maximum returns coupled with the security of being a government-owned scheme.
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