SCSS vs PMVVY: Which retirement savings scheme offers better returns and which one is right for you?

SCSS vs PMVVY: The Pradhan Mantri Vaya Vandana Yojana (PMVVY) and the Senior Citizens Savings Scheme (SCSS) are two well-liked retirement savings schemes offered by the Indian government. The SCSS is a post office-based small savings scheme with an interest rate of 8 per cent and a recently raised investment cap of Rs. 30 lakhs. Additionally, joint accounts are permitted with a 60 lakh rupee cap. The plan gives tax exemptions under Section 80C of the Income Tax Act and has a five-year maturity period

The PMVVY, on the other hand, is a pension plan managed by LIC with a joint account limit of Rs. 30 lakhs and a maximum investment limit of Rs. 15 lakhs. Any citizen 60 years of age or older may benefit from this scheme, which offers an interest rate of 7.30 per cent. However, the scheme will only last until March 31, 2023, and there are no tax benefits available.

Seniors citizens wishing to grow their income while saving money may find it advantageous to invest in these schemes. For those wishing to save money over the long term, the SCSS is a convenient alternative due to its higher investment limit and interest rate. Additionally, tax benefits provided by Section 80C of the Income Tax Act increase its value. The PMVVY delivers monthly income and, despite having a lower interest rate, may be a viable option for people searching for a reliable income stream after retirement.

Both schemes are well-liked by senior citizens and provide a number of advantages, such as joint accounts and larger investment limits. The PMVVY gives a fixed monthly income while the SCSS has a five-year maturity period. However, the PMVVY does not provide any tax breaks and is only in effect through March 31, 2023. Investors should therefore carefully assess their financial objectives and needs before selecting one of these schemes.

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