Thread by @myfinology

All you need to know about Senior Citizens Saving Scheme" (SCSS) 👴⛱️

- Min & Max Deposit
- Interest Rate
- Tax Benefits
- Eligibility Criteria
- Maturity Period
- Withdrawals

A Thread 🧵

◉ SCSS is a government-backed retirement savings plan.

The scheme allows eligible investors to invest a lump sum amount of money and offer a regular income to the investor post retirement as well as decent tax benefits.

#investing #retirement

◉ Any senior citizen (Above age 60) of the country, individually or jointly, can invest a lump sum amount in the scheme.

#personalfinances

◉ An investor who has attained the age of 55 years or more but less than 60 years, but has opted for VRS can also invest in this scheme.

◉ How much you can invest in SCSS?

The maximum limit for SCSS is Rs 15 lakh or the retirement corpus, whichever is less.

The account can be opened with a minimum amount of Rs 1,000.

◉ Interest on deposit :

The scheme currently offers interest of 7.4% per annum.

This interest rate is reviewed by the Ministry of Finance every quarter and subject to change.

But the interest payable is fixed on the date of deposit.

So, your existing deposits are not affected by change in interest rate, only the only fresh investments under SCSS are impacted.

◉ The interest is calculated and paid every quarter.

If you fail to claim the quarterly interest payment, such interest shall not earn additional interest.

◉ Maturity Period

The scheme comes with a maturity period of 5 years.

There is also an option to extend the maturity further for 3 more years.

◉ Premature withdrawal

Premature withdrawal is permitted after one year of the account opening, however, this will incur some charges.

◉ Tax Benefits

- Tax deduction up to Rs 1.5 lakh under Section 80C.
- Interest on SCSS is taxable as per the tax slab

◉ Where to open SCSS account?

A senior citizen can invest in this scheme by opening either an individual or joint account (along with spouse) with a post office or a scheduled commercial bank.

With reasonable interest rate & govt. guarantee, SCSS is one of the best investment plans for retired individuals.

But as one needs the post-retirement portfolio to grow at inflation-matching rates, you should park at least 20-30% of your corpus in large/multi-cap equity MFs.

Also, instead of investing all your PF or VRS corpus at one go, one should invest it in a staggered manner, depending upon the market condition.

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