Benefits Of Senior Citizens Savings Scheme, PPF (Public Provident Fund). Read

Investors looking for long-term and safe investments to ensure a secure future for themselves and their families can always rely upon some time-tested post office savings schemes.

Let us look at these post office savings schemes for long-term investments.

Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme (SCSS) is a small savings scheme that is quite popular among senior citizens despite the presence of other similar schemes like the National Pension Scheme (NPS) and Pradhan Mantri Vyay Vandana Yojana.

Adults over the age of 60, retired government employees over the age of 55 but under the age of 60 and retired military personnel over the age of 50 but under the age of 60 can establish an SCSS account. 

Under this scheme, a senior citizen can open an account individually or jointly with their spouse by making a minimum deposit of Rs 1,000 with a maximum deposit of Rs 15 lakh.

Senior citizens can also claim tax benefits up to Rs 1.5 lakh under section 80C on investments made under SCSS.

The scheme currently offers a return of 7.4 per cent per annum, payable every quarter. The SCSS has a 5-year maturity term. However, premature withdrawals are permitted any time after opening with a penalty.

Public Provident Fund Account (PPF)

PPF is among the most popular investment products for long-term investors. With a minimum deposit of Rs 500 and a maximum annual contribution of Rs 1.5 lakh, an adult who is a country resident can set up a PPF account. In contrast, in the case of a minor, an account under the scheme can be opened on their behalf by a guardian.

Deposits under the PPF scheme are eligible for exemptions under Section 80C of the Income Tax Act deductions. PPF has a 15-year maturity period, and on deposits, investors can receive interest at a rate of 7.1 per cent, which is annually compounded. 

Also, the interest earned under the scheme is completely tax-free as per the provisions of the Income Tax Act.

After five years, except for the year of account activation and depositors with maturity desire, a subscriber can withdraw up to 50 per cent of the amount.

After completing the 15-year maturity period, an investor may also choose to extend the PPF account for an additional 5-year period.

There is also an option of prematurely withdrawing the amount from a PPF account in case of an emergency, but only after five years of opening the account.

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