Those above 60 and without a regular income from a job easily constitute one of the most financially vulnerable sections of the Indian population. The problems are compounded since many suffer from different health-related conditions at advanced age.
To help them financially, the government of India launched an investment instrument especially designed for senior citizens – the Senior Citizens Saving Scheme, popularly known as SCSS.
Different ages of investment
As is evident from the name, one cannot invest in it unless one has turned 60.
An exception is made if an individual who is past 55 has retired under a VRS (Voluntary Retirement Scheme) and for retired defence personnel (excluding Civilian Defence employees) on attaining the age of 50.
One can invest a maximum amount of Rs 30 lakh.
The government has made provisions for a special interest rate of 8.2%. It comes up for revision every quarter.
The calculations
Let’s turn to the numbers now.
Investment of Rs 2.5 lakh
If someone invests Rs 2.5 lakh in SCSS, it will fetch a quarterly interest payout of Rs 5,125. The total payout over 5 years will be Rs 102,500.
Investment of Rs 5 lakh
Let’s double the investment to Rs 5 lakh. The quarterly interest payout rises to Rs 10,250. The total interest payout over 5 years would amount to Rs 205,000.
Investment of Rs 10 lakh
If the investment is increased to Rs 10 lakh, the interest payable every 3 months goes up to Rs 20,500. The total interest payable in 5 years becomes Rs 4,10,000.
Investment of Rs 20 lakh
Consider an investment of Rs 20 lakh. This pushes up the interest payable every quarter to Rs 41,000.
Investment of Rs 30 lakh
An investment of Rs 30 lakh would fetch interest of Rs 61,500 every 3 months. It works out to a monthly payment of Rs 20,500.
Tenure of SCSS
SCSS bears a term of 5 years, which can be extended to 8. The interest is paid every quarter.
Therefore, it can effectively used as a source of monthly pension by those who don’t have a pension either by virtue of their service or investments through NPS (National Pension System) etc. Even those who have a regular pension can invest in this SCSS for enhanced regular cash flows.
SCSS can be opened by an individual or jointly with the spouse.
A golden scheme for senior citizens, SCSS fetches you the highest guaranteed returns in India. It is designed to offer a bit of extra help to a vulnerable population. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
