Post Retirement Investment Options In India

Post retirement investment options in india

Many people find it difficult to lead the normal lifestyle after retirement because the salary is replaced with .

6 investment options for the retired

When their income comes down they have to cut expenses owing to cost of living. But with proper you can generate enough income after retirement.

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Here are the few investment options run by Government of India for senior citizens. These schemes are focused to generate regular fixed income to meet the expenses after of people.

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Senior Citizens Savings Scheme

It a is scheme unlike the equity, stock market which than Bank FDs or Post Office Monthly Income Schemes.

Who Can Invest

As the Scheme’s name suggests any individual aged 60 or more is eligible to make in this scheme.

Those people who take early retirement at the age of 55 or below 60 are also eligible to apply and investment in the scheme.

How to Invest

Any individual senior citizen can invest by opting either as a sole person or a joint account with in any post office or a scheduled commercial bank.

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Here is the list of documents you need to submit while making in the Senior Citizen Savings Scheme.

  • Duly application form available in bank or post offices.
  • Know your customer (KYC) Form.
  • Photograph of applicant/s.
  • Permanent Account Number (PAN Card)
  • Aadhaar Card
  • Address Proof such as Voter ID Card, Aadhaar Card.
  • Age Proof

Once you invest you will be provided with a Passbook which includes Date of Opening, Account Number, Maturity date, Nominee’s details, Name, Address, Account holder’s photograph and the amount invested in this scheme etc.

How much amount can be invested

An individual can invest of Rs.

15 lakh. But the person cannot invest more than the amount he/she receives on retirement.

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If the individual receives Rs. 10 lakh he can invest of Rs. 10 lakh. The individual is not permitted to add Rs.

Post retirement investment options in india

5 lakh more to reach the highest investment level of Rs. 15 lakh. SCSS account may be opened by depositing cash up to Rs.

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1 lakh or less. When the investment amount exceeds Rs. 1 lakh the amount to be paid by issuing or via internet banking from account.

the interest rate of the scheme is 8% per year and may change according to the Government of India’s directives.

Tenure

The tenure of Senior citizen Savings Scheme is five years and can be further extended for 3 more years. Premature withdrawal is possible after one year, but it attracts penalty. If you withdraw before 2 years from the starting date the charges you have to pay is 1.5% on the deposited money and after 2 years the penalty is 1% of your deposit.

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No charges are levied on the premature closure of account in the case of depositor’s death.

Taxation

Investment in Senior Citizen Savings Scheme qualifies for tax deduction under the section 80C up to the maximum limit of Rs. 1.5 Lakh. But the interest earned from Senior Citizens Savings Scheme is fully taxable according to the Income Tax Act, 1961.

Pradhan Mantri Vaya Vandana Yojana

Another scheme for senior citizens.

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It was launched on 11.04.2014 backed by Government of India for Senior citizens to ensure source of income after their retirement. Any individual senior citizen can open this account in any registered LIC office or via Online Mode also.

Upper Cap

A senior citizen is allowed to make up to Rs.

15 lakh. The last date to apply for this scheme is 31st March 2020.

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If husband and wife both are senior citizens they both are eligible to make of Rs. 15 lakh individually.

Death benefit

On the death of the the aggregated amount will be credited to the nominee’s bank account and the scheme will be closed.

Mode of premium payment

The payment of pension is given in the frequency of Monthly or quarterly or half yearly or yearly basis to the policy holder’s enabled bank account.

Surrender & Loan Facility

The term period of the scheme is 10 years.

exit is possible for the purpose of treatment of self or spouse. In the case of premature withdrawal 98% of the invested money is permissible for withdrawal.

Loan facility is available on the invested money after the completion of 3 years from the date of investment.

One can receive 75% of the invested money as . The interest rate for is 10% calculated half yearly.

Interest rate

The current interest rate of the scheme is 8%.

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Let’s understand the monthly amount one individual may get after investment.

Suppose one individual invests Rs. 1000/- in Pradhan Mantri Vayaa Vaydana Yojana.

Post retirement investment options in india

His income will be as follows.

  • Monthly = Rs. 80/-
  • Quarterly = Rs.

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    80.50/-

  • Half Yearly = Rs. 81.30/-
  • Yearly = Rs. 83/-

Suppose an individual invests Rs. 15 lakh for the 10 years and chooses monthly pension mode then the interest the individual will get is Rs. 10,000/- per month.

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Do you have any questions about SCSS & PMVVY?

Post retirement investment options in india

Please leave a comment and we can have a discussion. If you have found this post helpful feel free to share with your loved ones.


Jharna Majee

The Post was written by Jharna Majee, the founder of this blog.

Post retirement investment options in india

Capitalante is a Financial Educational Blog focus to share the knowledge of Stock market, Mutual funds, Insurance, Financial Planning, Tax Planning, Income Tax, Goods and Service Tax and different kinds of matter related to investment & Personal Finance that will make you financially literate.