Senior Citizen Savings Scheme and Post Office monthly income schemes are one of the most popular investment options to earn monthly income. The Pradhan Mantri Vaya Vandana Yojana (PMVVY), which also provides monthly income, was launched in May 2017. In each of these schemes, investors put a lumpsum amount into the scheme and earn regular income from it. To be able to invest in Senior Citizen Savings Scheme and Pradhan Mantri Vaya Vandana Yojana one needs to attain the age of 60 as the schemes are meant for senior citizens. There is no such age restriction for investing in post office monthly income schemes.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) From LIC
LIC or Life Insurance Corporation operates the government's 8 per cent pension scheme for senior citizens, called Pradhan Mantri Vaya Vandana Yojana (PMVVY). LIC started offering the scheme from May 4, 2017, and the scheme will remain open till May 3, 2018. Senior citizens are guaranteed 8 per cent interest rate for 10 years under this scheme. Under PMVVY, pension is payable as per the frequency chosen by the subscriber - monthly/quarterly/half-yearly/yearly - during the policy tenure of 10 years. To earn pension in the monthly mode, the minimum amount investment amount is Rs. 1.5 lakh which will earn a pension of Rs. 1,000 per month. The maximum investment allowed is Rs.7.5 lakh which will earn Rs.5,000 pension per month.
There is a minimum and maximum limit for investment in the Pradhan Mantri Vaya Vandana Yojana scheme. The amount varies according to the pension payment mode chosen. For example, under the yearly pension mode, the minimum amount to be invested in the scheme is Rs. 1,44,578 and the maximum at Rs. 7,22,892. In the monthly mode, the minimum amount to be invested is Rs. 1,50,000 and the maximum at Rs. 7,50,000.
At the end of the policy term of 10 years, the pensioner gets back the purchase price (amount invested to earn pension) along with final pension instalment. On death of the pensioner during the policy term of 10 years, the purchase price will be paid to the beneficiary. ( Read more about Pradhan Mantri Vaya Vandana Yojana)
Post Office Monthly Income Scheme or Post Office MIS
Post office monthly income scheme is a popular investment scheme offered by post offices. Here an individual invests a particular sum and gets an assured monthly income in the form of interest. The monthly interest is credited into your post office savings account. This scheme is suitable for those who want a steady flow of income, such as retired persons. A person who wants to open a Post Office Monthly Income Scheme account now will get an interest rate of 7.3 per cent per annum.
The scheme can be prematurely closed after one year. A deduction amounting to 2 per cent of the deposit will be applicable to a depositor closing the account between 1 year and three years after opening. And after three years, 1 per cent will be deducted. The remainder will be paid to the depositor. (Read more about Post Office Monthly Income Scheme)
Senior Citizen Savings Scheme
An individual of the age of 60 years or more may open the Senior Citizen Savings Scheme Account, according to India Post website. An individual of the age of 55 years or more but less than 60 years who has retired on superannuation or under VRS can also open account subject to the condition that the account is opened within one month of receipt of retirement benefits and amount should not exceed the amount of retirement benefits, India Post website adds. Maturity period of Senior Citizen Savings Scheme is 5 years. A depositor may operate more than one account in individual capacity or jointly with spouse (husband/wife). Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act. TDS is deducted at source on interest if the interest amount is more than Rs 10,000 per annum. Currently, Senior Citizen Savings Scheme offers an interest rate of 8.3 per cent. (Read more on Senior Citizen Savings Scheme)