India is a country with the highest younger generation people. Compared to many developed countries, there is less focus for differently abled & elderly people. It is true that they do not have encouraging environment in this Country. In addition, the elderly do not have economically good guidance. Nowadays the rate of interest for savings schemes is decreasing,hence the guidance becomes essential.
In my previous post Good Monthly Income Scheme, I did not specify that it was best plan for senior citizens.Because there is a better plan for senior citizens than POMIS and I mean it is not just about the Pradhan Mantri Vaya Vandhana Yojana(PMVVY)!!! It's also about 'Senior Citizen Savings Scheme(SCSS)'. Pradhan Mantri Vaya Vandhana Yojana was introduced when I was about to write on SCSS. Okay, I have decided to write about both of them.
Pradhan Mantri Vaya Vandhana Yojana(PMVVY):
Anyone who is above 60 years are eligible to join.
The maturity period of the investment is 10 years.
Investment can be done Only through LIC.
You can choose to receive interest on monthly basis, quarterly basis, half-yearly, or yearly basis.
The minimum and maximum investment details are given below.
For 10 years, interest rate is guaranteed at least 8%. In the normal term deposit, RBI will increase or decrease interest rate once every three months which is NOT applicable for this scheme. However, it is necessary to check for any of the *conditions apply before investing money in this scheme.
The interest rate will vary depending on the interest rate we choose. If we invest Rs.1,50,000, the interest table is below.
Interest payments will be credited in any of your bank account through NEFT.
If the investor died within policy period(10 years), Nominee will be eligible to get investor's money.
After 3 years, 75% of the investment can be taken as loaned. But the interest for that loan will eat your income & capital.
There is no income tax exemption for this scheme.
If there is a setback in this plan, you can not take the invested money whenever you wish. If you or your spouse need money for critical illness then only you can withdraw the invested amount. In this case, 2% will be taken as penalty and 98% will be returned. Check the list of any 'Critical Illness' before investing in this scheme.
Senior Citizen Savings Scheme has been introduced and available since 2004. It was introduced by the postal department first & now available in around 25 banks. But even some of the bankers does not know about this scheme. If the senior citizens asks for good income scheme, every bank recommends 5 year term deposits for which senior citizens will have additional interest rate of just 0.25%.
Below are the features of the SCSS:
Anyone who is above 60 years of age are eligible to join. Those who retired through VRS and above 55 years are also eligible with few additional criteria.
Investment can be done in the range of Rs.1000 to Rs.15 lakhs. Upper limit is higher than the PMVVY scheme
As of July 1, 2017, 8.3% interest rate has been given. This will be increased/deccreased by RBI once in every three months. The maximum interest rate offered was 9.3% during 2012-13 fiscal.
Interest will be credited to your bank account once in every 3 months.
Youur investment will mature in 5 years. If you wish,you can extend it up to 8 years.
You can provide a nominee for your investment.
There is no income tax exemption for this scheme.
You can not withdrew money invested for at least 1st year end.
Upon withdrawal between 1 to 2 years, 1.5% penalty will be charged. For Ex, If you invest in 1 lakh and withdraw it in 1.5 years, you will get only 98500. But in this 1.5 year, you would have already Rs. 18675 Via Interest.
Upon withdrawal between 2 to 5 years, 1% penalty will be charged. For Ex, If you invest in 1 lakh and withdraw it in 3.5 years, you will get only 99000. But in this 3.5 year, you would have already Rs. 43275 Via Interest.
Below a comparison with other income schemes,
SCSS provides more interest amount than fixed deposits (FD). Similarly, It has higher interest rate than PMVVY. Even though the National Savings Certificate (NSC) is more profitable, you can not get out of it during the whole 5 year period. Also, Interest will not be dispersed in every quarter.
On the whole, Senior citizen who don't need investment money urgently or within 10 years. Also who is looking for at least 8% interest rate can be invest in PMVVY. For others, I believe that the SCSS will be the best pension investment. Apart from this, Investors can decide based on their own personal circumstances.
In my previous post Good Monthly Income Scheme, I did not specify that it was best plan for senior citizens.Because there is a better plan for senior citizens than POMIS and I mean it is not just about the Pradhan Mantri Vaya Vandhana Yojana(PMVVY)!!! It's also about 'Senior Citizen Savings Scheme(SCSS)'. Pradhan Mantri Vaya Vandhana Yojana was introduced when I was about to write on SCSS. Okay, I have decided to write about both of them.
Pradhan Mantri Vaya Vandhana Yojana(PMVVY):
Anyone who is above 60 years are eligible to join.
The maturity period of the investment is 10 years.
Investment can be done Only through LIC.
You can choose to receive interest on monthly basis, quarterly basis, half-yearly, or yearly basis.
The minimum and maximum investment details are given below.
| Mode of Pension | Minimum Purchase Price | Maximum Purchase Price |
| Yearly | Rs. 1,44,578/- | Rs. 7,22,892/- |
| Half-yearly | Rs. 1,47,601/- | Rs. 7,38,007/- |
| Quarterly | Rs. 1,49,068/- | Rs. 7,45,342/- |
| Monthly | Rs. 1,50,000/- | Rs. 7,50,000/- |
For 10 years, interest rate is guaranteed at least 8%. In the normal term deposit, RBI will increase or decrease interest rate once every three months which is NOT applicable for this scheme. However, it is necessary to check for any of the *conditions apply before investing money in this scheme.
The interest rate will vary depending on the interest rate we choose. If we invest Rs.1,50,000, the interest table is below.
| Mode of Pension | Interest Rate | Interest Per annum for 1.5 Lakh Invested |
| Yearly | 8.30% | Rs. 12,450/- |
| Half-yearly | 8.13% | Rs. (6907.5*2)=12,195/- |
| Quarterly | 8.05% | Rs. (3018.75*4)=12,075/- |
| Monthly | 8.00% | Rs. (1000*12)=12,000/- |
Interest payments will be credited in any of your bank account through NEFT.
If the investor died within policy period(10 years), Nominee will be eligible to get investor's money.
After 3 years, 75% of the investment can be taken as loaned. But the interest for that loan will eat your income & capital.
There is no income tax exemption for this scheme.
If there is a setback in this plan, you can not take the invested money whenever you wish. If you or your spouse need money for critical illness then only you can withdraw the invested amount. In this case, 2% will be taken as penalty and 98% will be returned. Check the list of any 'Critical Illness' before investing in this scheme.
Senior Citizen Savings Scheme has been introduced and available since 2004. It was introduced by the postal department first & now available in around 25 banks. But even some of the bankers does not know about this scheme. If the senior citizens asks for good income scheme, every bank recommends 5 year term deposits for which senior citizens will have additional interest rate of just 0.25%.
Below are the features of the SCSS:
Anyone who is above 60 years of age are eligible to join. Those who retired through VRS and above 55 years are also eligible with few additional criteria.
Investment can be done in the range of Rs.1000 to Rs.15 lakhs. Upper limit is higher than the PMVVY scheme
As of July 1, 2017, 8.3% interest rate has been given. This will be increased/deccreased by RBI once in every three months. The maximum interest rate offered was 9.3% during 2012-13 fiscal.
Interest will be credited to your bank account once in every 3 months.
Youur investment will mature in 5 years. If you wish,you can extend it up to 8 years.
You can provide a nominee for your investment.
There is no income tax exemption for this scheme.
You can not withdrew money invested for at least 1st year end.
Upon withdrawal between 1 to 2 years, 1.5% penalty will be charged. For Ex, If you invest in 1 lakh and withdraw it in 1.5 years, you will get only 98500. But in this 1.5 year, you would have already Rs. 18675 Via Interest.
Upon withdrawal between 2 to 5 years, 1% penalty will be charged. For Ex, If you invest in 1 lakh and withdraw it in 3.5 years, you will get only 99000. But in this 3.5 year, you would have already Rs. 43275 Via Interest.
Below a comparison with other income schemes,
SCSS provides more interest amount than fixed deposits (FD). Similarly, It has higher interest rate than PMVVY. Even though the National Savings Certificate (NSC) is more profitable, you can not get out of it during the whole 5 year period. Also, Interest will not be dispersed in every quarter.
On the whole, Senior citizen who don't need investment money urgently or within 10 years. Also who is looking for at least 8% interest rate can be invest in PMVVY. For others, I believe that the SCSS will be the best pension investment. Apart from this, Investors can decide based on their own personal circumstances.
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