PPF and Seniors Savings Program are good long-term investment options
Investors looking for long-term and secure investments to ensure a secure future for themselves and their families can always rely on a number of proven mail-in savings programs. .
Let us review postal savings schemes for long-term investments.
The Senior Citizen Savings Program (SCSS)
The Senior Citizen Savings Program (SCSS) is a small savings scheme that is quite popular among senior citizens despite the presence of other similar programs such as the National Pension Scheme (NPS). and Pradhan Mantri Vyay Vandana Yojana.
Adults over 60, retired government employees over 55 but under 60, and retired military personnel over 50 but under 60 can set up a SCSS account.
Under this scheme, a senior citizen can open an individual or joint account with their spouse by making a minimum deposit of Rs 1,000 with a maximum deposit of Rs 15 lakh.
Seniors can also claim tax benefits of up to Rs 1.5 lakh under section 80C on investments made under SCSS.
The program currently offers a return of 7.4% annually, payable quarterly. SCSS has a term of 5 years. However, early withdrawals are allowed at any time after opening with a penalty.
Public investment fund (PPF) account
PPF is one of the most popular investment products among long-term investors. With a minimum deposit of Rs 500 and a maximum annual contribution of Rs 1.5 lakh, an adult who is a national resident can set up a PPF account. Conversely, in the case of minors, the guardian can open an account under the program on their behalf.
Deposits under the PPF program qualify for an exemption under Section 80C of the Withholdings of the Income Tax Act. PPF has a maturity of 15 years and on deposits investors can receive 7.1% interest, compounded annually.
In addition, interest earned under this scheme is completely tax-free under the provisions of the Income Tax Act.
After five years, excluding the year of account activation and the depositor’s need to mature, the subscriber can withdraw up to 50% of the amount.
Upon completion of the 15-year maturity, an investor can also choose to extend the PPF account for another 5 years.
There is also the option of early withdrawal of funds from a PPF account in case of an emergency, but only after five years of account opening.
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