The Senior Citizens Savings Scheme (SCSS) is a popular government-backed investment option tailored for individuals above the age of 60. It offers a safe way for retirees to grow their savings with attractive returns and minimal risk. Here’s how retirees can earn ₹24 lakh in 5 years through the SCSS:
Key Features of the SCSS:
- Interest Rate: The SCSS offers an interest rate of around 8% to 9% per annum (subject to changes by the government).
- Investment Limit: A single senior citizen can invest up to ₹15 lakh in the scheme, while a couple can invest up to ₹30 lakh.
- Tenure: The scheme has a maturity period of 5 years, which can be extended by an additional 3 years after the initial tenure.
- Interest Payout: Interest can be received quarterly, which is useful for retirees seeking regular income.
- Tax Benefits: The SCSS qualifies for tax deduction under Section 80C of the Income Tax Act, making it a tax-efficient investment.
Earning ₹24 Lakh in 5 Years:
To reach ₹24 lakh in 5 years, consider the following:
- Initial Investment: Let’s assume an investment of ₹15 lakh, which is the maximum allowed for an individual.
- Annual Interest Income: At an 8% annual interest rate, ₹15 lakh will generate an annual interest income of ₹1.2 lakh.
- Interest Over 5 Years: Over the five-year term, you would earn ₹6 lakh in interest. However, if you reinvest the interest at regular intervals, you can accumulate additional earnings.
- Extended Investment: If the SCSS is renewed for a 3-year term after the initial 5 years, the interest accumulation continues, helping you surpass ₹24 lakh, depending on interest rate variations and reinvestment strategies.
This simple, low-risk scheme can be an excellent tool for retirees to ensure steady income while safeguarding their principal investment.
