India Post scheme ensures safety, returns for elderly investors

HYDERABAD: In the latter part of one’s life, when safety of investments becomes a bigger priority than returns, Senior Citizen Saving Scheme (SCSS) offered by India Post can be the best option for elderly investors.

The prime advantage of SCSS is that even on the returns front, it offers a better rate than several other options available for senior citizens. It offers flexibility, thus making it ideal for elderly investors.

While normally a person needs to be of the age of 60 years or more to open a SCSS account, in special circumstances, an individual of 55 years or more but less than 60 years, who has retired on superannuation or under VRS can also open an account, subject to the condition that the account is opened within one month of receipt of retirement benefits, and that the amount should not exceed the amount of retirement benefits.

“After 60 years, an investor’s top priority is safety. But at the same time, they cannot also compromise on returns, since by that time, their income sources will be limited. In such a delicate situation, the Senior Citizen Saving Scheme of postal department will be apt for elderly people, in striking the balance between safety and returns. SCSS offers 8.3 per cent returns per annum on deposits, which is more than even the interest offered by banks to senior citizens on fixed deposits. It offers better returns than even the National Savings Certificate. Thus, it can be unambiguously said that SCSS is the best option for elderly people to best utilise their savings and maximise returns in the latter part of life, when their risk appetite is less,” explains M Devaraja Reddy, senior CA and former president of The Institute of Chartered Accountants of India.

The fact that SCSS is offered by the postal department, and can be availed from any post office in one’s neighbourhood, brings in trust and ensures ease of operation. Though the practice of investing in equities, mutual funds and others is rising, the traditional bond people have with post offices over the decades also instils a sense of confidence in the scheme.

Besides safety and good returns, SCSS also offers flexibility. An individual can deposit in one SCSS account up to a maximum amount of Rs 15 lakh. A depositor may also operate more than one account in individual capacity or jointly with spouse. While the maturity period is five years, premature closure is allowed after one year on deduction of an amount equal to 1.5 per cent of the deposit and after two years, on deduction of one per cent of the deposit.

“One should plan one’s investments with more caution and wisdom in the later part of life. While investing in equities, mutual funds and equity-linked savings schemes might give better returns if planned properly, it also has a risk element. Even if one invests a part in risky avenues, it would be definitely wise and rewarding to invest some part of their money in SCSS offered by the postal department. I suggest elderly investors to definitely make SCSS part of their portfolio without fail, due its good returns and security,” stressed Subba Rao Anupindi, a senior CA and financial adviser.