One of the best investment tools for your parents or anyone who is over 60 years of age is the Senior Citizen Savings Scheme (SCSS). Here are a few reasons why you should consider it:
This investment tool from the Government of India provides retirement benefits for individuals above the age of 60. The maximum amount that can be deposited in this scheme is Rs 30 lakh.
The returns of the SCSS are high when compared to bank savings & Fixed Deposit accounts. This scheme offers an interest rate of 8% p.a. with a quarterly payout % has a shorter tenure of 5 years - half of what Pradhan Mantri Vaya Vandana Yojana offers.
Senior citizens can claim a tax deduction of up to Rs 1.5 lakh for investments in SCSS under Section 80C of the Income Tax Act, 1961.
After 1 year of opening the account, premature withdrawal is allowed. However, 1.5% & 1% of the amount deposited will be charged in case of premature withdrawals after 1 year & 2 years, respectively.
However, interestingly from April 1, 2023, senior citizens can invest an extra Rs 15 lakh in this scheme.