SCSS vs PMVVY vs POMIS – With RBI providing financial help in the lockdown, it has reduced repo rate along with that most banks reduced their fixed deposit interest rates which has hurt the senior citizens who are dependent on monthly, quarterly or half-yearly interest income. After the reduction in interest rates and the closure of RBI at 7.75 per cent the investors depending upon bank’s fixed investments are left with limited choices yet had to be safe.
we have not considered bank FDs as prominent banks are showcasing low returns and also post-office time deposits are offering only annual interest payments which are not beneficial further. By looking at 3 such investment schemes which are Senior Citizen Savings Scheme (SCSS), Pradhan Mantri Vaya Vandana Yojana (PMVVY) and Post Office Monthly Scheme (POMIS).
Senior Citizen Savings Scheme (SCSS) – in this investment scheme, there is guaranteed return after 5 years. It can be extended after maturity for 3 years but no change in the existing interest rate will apply. For now, SCSS has interest rate of 7.4 per cent per annum and is paid on quarterly basis. Citizens who are above 60 can invest in the scheme with an upper limit of the amount that is 15 lakhs. This scheme is mentioned under the tax benefit of section 80 C.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) – This scheme was recently modified and extended by the government for the next three financial years till March 2023. In the amendments, the interest rate is declared 7.4 per percent payable monthly. To invest in the scheme, one has to consult LIC as it is the only authorised institution to keep record. The PMVVY is a pension scheme exclusively for senior citizens above the age of 60 which comes with guaranteed returns on monthly, quarterly, half-yearly and annually for a time period of consecutive 10 years.
The maximum investment under this scheme is 15 lakhs per senior citizen to which the monthly pension is Rs 9250 per month.SCSS So, if a couple takes up the scheme the monthly pension would be Rs 18,500 in the family for an investment of Rs 30 lakhs.
Post Office Monthly Income Scheme (POMIS) – It holds up for a duration of 5 years. Currently, the interest rate on POMIS is 6.6 per cent payable monthly. The maximum investment under a single individual can be Rs 4.5 lakhs while it is 9 lakhs under a joint name. No tax advantages are provided by the Post Office monthly income scheme.
All the three investment schemes are safe and secure as they are leaded under government’s supervision. Instead of investing the amount at one place, individual should diversify across these investments to keep the income regular, taxation under control and liquidity into future consideration.