Best savings scheme: Invest ₹15 lakh and get ₹22 lakh — this government plan beats FDs

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The Senior Citizens Savings Scheme is a solid option

If you’re over 60 and have a lump sum to invest, the Senior Citizens Savings Scheme (SCSS) is worth considering. This government-backed savings plan is designed to offer guaranteed returns with minimal risk, making it ideal for retirees. What makes SCSS stand out is its high interest rate—currently at 8.2% per annum—which is better than most fixed deposits offered by banks.

How ₹15 lakh can grow into ₹22 lakh

Under the SCSS, you can invest up to ₹30 lakh, but even with ₹15 lakh, the interest payout is impressive. Over a 5-year period, a ₹15 lakh investment at 8.2% annual interest will fetch you around ₹6.15 lakh in total interest, taking your maturity amount to ₹21.15 lakh. With a three-year extension available, your total earnings can go beyond ₹22 lakh if you choose to extend the investment.

The scheme pays out interest every quarter, so it also works as a steady income option for senior citizens. And because it's a government scheme, the returns are secure—unlike some market-linked products.

What else makes SCSS attractive

SCSS offers more than just good returns. It provides tax benefits under Section 80C of the Income Tax Act, up to ₹1.5 lakh a year. However, the interest earned is taxable, and if the interest income crosses ₹50,000 in a year, TDS will be applicable. That said, if you submit Form 15H (for those without taxable income), you can avoid TDS deductions.

The account can be opened easily at any post office or authorised bank, and premature closure is allowed with a small penalty. If you’re a retiree from defence or railways, you may even be able to open the account before 60.

FAQs

Q. Who can open an SCSS account?
Anyone above 60 years old can open it. Retirees between 55 and 60 years may also qualify under certain conditions.

Q. Can I open more than one account?
You can open multiple accounts, individually or jointly with your spouse, but the total combined investment cannot exceed ₹30 lakh.

Q. Is the interest rate fixed?
The rate is reviewed every quarter but stays fixed for the duration of your SCSS account once opened.