Latest news with #PostOfficeMonthlyIncomeScheme
News18
3 days ago
- Business
- News18
SCSS To Post Office Savings: Investment Schemes For Senior Citizens To Build Emergency Fund
Last Updated: Whether it's a sudden medical expense or any unplanned big-ticket spending, an emergency fund could help to meet such unexpected financial needs. Life is full of surprises, and emergencies can occur when we least expect them. Just when you believe you have everything under control, life throws a curveball at you. This is why building an emergency fund is crucial for financial stability at any age, especially for senior citizens. Whether it's a sudden medical expense or a family emergency, having a financial safety net can bring peace of mind and reduce stress. An emergency fund is a dedicated pool of money set aside to take care of unexpected expenses, guarding you against potential debt. It allows you to cover unforeseen expenses without resorting to high-interest loans or going into debt. Having this financial cushion will also make sure that you don't borrow money and be stressed with its accompanying interest payments. National Pension Scheme (NPS) It is a government-backed savings plan scheme for senior citizens. The National Pension Scheme provides financial security and a regular income to secure their future post-retirement. If needed, the scheme allows limited, tax-free withdrawals for specific needs like medical expenses. This scheme also offers tax benefits under Section 80C of the Income Tax Act, 1961, and an additional Rs 50,000 under Section 80CCD (1B). SCSS offers a secure, risk-free way for retirees to manage savings while earning interest, often at higher rates than standard savings accounts. Specially tailored for individuals aged 60 and above, this government-backed scheme offers secure returns. Currently, the government offers an 8.2% interest rate per annum under the SCSA scheme. Post Office Monthly Income Scheme (POMIS) The next savings plan you can consider is the Monthly Income Scheme by the post office. It is a reliable savings plan for senior citizens, providing a fixed income to investors every month. In this government-backed scheme, the investors can put a lump sum amount, and every month it pays 7.4 percent interest on the amount invested. After five years, the scheme matures and individuals can withdraw or reinvest the principal amount. RBI Bonds Another investment option, backed by the Indian government, that you can consider is RBI bonds. It offers a fixed interest rate of 8.05 percent per annum, paid semi-annually, ensuring regular income. With a lock-in period of 7 years, the scheme allows senior citizens to withdraw the money after 4 years. Equity Linked Savings Scheme (ELSS) Designed with equity exposure, it is a mutual fund that helps investors accumulate wealth while saving on taxes. This scheme has the shortest lock-in period among tax-saving investments, making it the most preferred during emergencies. Moreover, it offers tax benefits within the overall Rs 1.5 lakh per annum limit under Section 80C. view comments First Published: July 25, 2025, 19:30 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
News18
17-07-2025
- Business
- News18
Want Monthly Income After Retirement? This Post Office Scheme Gives Rs 9,250 Every Month
1/9 Most people want to invest their hard-earned money in a place where they receive guaranteed returns and security. Because of this, various bank and post office schemes are very popular. (News18 Tamil) Generally, people plan their investments with the future in mind. Without a pension, it can become quite difficult to manage household expenses after retirement. (News18 Tamil) 3/9 However, there are several schemes where, if you invest at the right time, you can receive a fixed income every month. One such plan is the Post Office Monthly Income Scheme (POMIS). By depositing a lump sum amount, you can earn a guaranteed monthly income. (News18 Tamil) Anyone above 18 years of age can open a POMIS account. The scheme allows both individual and joint accounts. The most important feature of this government-backed scheme is that your investment is completely secure, and you receive monthly interest at a fixed rate. (News18 Tamil)
News18
17-07-2025
- Business
- News18
PPF To POMIS: 4 Effective Investment Schemes By India Post
Last Updated: Indian Post provides a range of investment alternatives to accommodate the demands of various investors. Besides being a network for letters and packages, India Post has been a reliable company for small savings and safe investments for decades. All post office savings plans are guaranteed to yield returns because they are backed by the Indian government. Moreover, Section 80C permits tax exemptions up to Rs 1,50,000 for most of the post office investment schemes. Continue reading to learn more about the Post Office's four investment programs, which include the Sukanya Samriddhi Yojana (SSY) and the Public Provident Fund (PPF). Public Provident Fund (PPF) With a 15-year investment period, the Public Provident Fund (PPF) is a long-term investment. The annual maximum investment is Rs 1.5 lakh, while the minimum is Rs 500. PPF provides a 7.10 per cent annual compound interest rate. A PPF account investment is eligible for a tax deduction under Section 80C of the Income Tax Act. Since its interest is completely tax-free, it also provides a tax-efficient return. National Savings Certificate (NSC) NSC is a risk-free and tax-efficient savings plan with a five-year maturity period for long-term and conventional investors without a risk appetite. The interest rate offered by NSC is 7.7 per cent annually, compounded every six months, and payable at maturity. The lowest amount of investment is Rs 1000, and there is no upper limit. You can invest in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000. The Sukanya Samriddhi Yojana, which is intended for girls aged 10 and under, can be initiated with a minimum investment of Rs 250 and a maximum investment of Rs 1.5 lakh annually. It provides a yearly compound interest rate of 8.2 per cent. Section 80C provides a tax deduction of up to Rs 1.5 lakh annually for investments made into SSY. Only the girl child's parents or legal guardians may open a Sukanya Samriddhi account in her name. Post Office Monthly Income Scheme (POMIS) A monthly income plan must be opened with a minimum of Rs 1000. A single account may hold up to Rs 9 lakh, while a joint account may hold up to Rs 15 lakh. The account holder is allowed to withdraw the deposit and end the account whenever they like, after a year from the date of opening. The Post Office MIS interest rate is now 7.4 per cent annually, payable on a monthly basis, and has a five-year maturity period. Visit the nearest Post Office branch to conveniently invest in a post office savings scheme. You can also invest online or offline with a variety of private and public sector banks in Post Office Savings schemes like Sukanya Samriddhi Yojana (SSY), Public Provident Fund (PPF), National Savings Certificate (NSC), etc. view comments First Published: July 17, 2025, 08:59 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Mint
07-07-2025
- Business
- Mint
For regular income in retirement, you can't beat debt mutual funds
Ojas is not someone who is ever perturbed. His friends regard him as cool and unflappable. There's a certain edge to him, a swagger that makes him stand out. Ojas is in sales and has been a top performer for most of his illustrious career, which is coming to a close. He has some investments but hasn't paid much attention to his personal finances. His elder brother Tejas has been managing his investments. Once he retires, he will need a regular income to meet his expenses. Tejas has told him about several options such as fixed deposits (FDs), bonds, non-convertible debentures (NCDs), the Post Office Monthly Income Scheme, the Senior Citizen Savings Scheme, through which he can earn a regular income in retirement. These all looked like good options to Ojas. While having lunch with his colleague Arpit, Ojas discussed plans for earning a regular income in retirement. Arpit told him withdrawing money regularly from mutual funds was one way of doing so, adding that it was a tax-efficient and flexible option. Ojas learned that this method was called systematic withdrawal. Arpit suggested he learn more about it from his financial advisor Narasimhan. Understanding systematic withdrawals Narasimhan explained the concept to him thus: Withdrawals from mutual fund investments can be set up to be monthly, quarterly, etc. They can be set up any time, stopped when no longer needed, and the amount withdrawn can be increased or decreased as required. This offers a lot of flexibility. While you can make systematic withdrawls from any type of mutual fund, it is best to do from a debt-oriented fund the goal is to set up a regular flow of income. More than anything else, the highlight of this vehicle is its tax-efficiency. A tax-efficient income stream: Mutual Funds are subject to capital gains tax on redemption. This treatment reduces the effective tax to be paid and improves the effective interest earned. FDs and bonds on the other hand are subject to income tax, which is much higher. Understanding capital gains tax: Narasimhan explained this with an example. Say you invest ₹10 lakh each in a debt mutual fund and an FD. For simplicity, and to compare like with like, we assume a uniform return of 8% a year. Let's say withdrawals are made quarterly. In the case of the FD, the 2% interest would be ₹20,000 and the tax (assumed to be 30%; ignoring cess and surcharge for the moment) would be ₹6,000, meaning the retained amount would be ₹14,000. The effective returns would thus be 5.6% a year. Narasimhan explained that this tax would not apply to Ojas if his income was below the taxable threshold. In case of mutual funds, too, the returns earned would be ₹20,000. To calculate the gains on the withdrawn units, let us assume that the mutual fund unit was bought at a net asset value (NAV) of Rs100. The number of units for a ₹10-lakh investment would be 10,000. After a quarter, ₹10 lakhs would become ₹10.2 lakh. The units being constant, the NAV would have gone up to ₹102 to reflect the ₹20,000 of earnings in the quarter. The number of units withdrawn would be 196.08 ( ₹20,000/102). Their original cost was ₹19,608 (196.08 x 100). The capital gain is thus ₹392 ( ₹20,000 – ₹19,608). The tax on this at 30% would be ₹118. the amount retained would be ₹20,000 – ₹118, or ₹19,882. This means the effective return would be 7.95% a year! Narasimhan also told Ojas that the interest on FDs, once set up, couldn't be paused, as with systematic withdrawals from mutual funds. This lack of flexibility could translate to unnecessary tax payouts. Some people set up systematic withdrawals from hybrid or even equity funds. Despite the volatility, this is fine if the withdrawals are small. However, Narasimhan said he usually recommends only debt funds for systematic withdrawals as they as far less volatile than equity funds. Narasimhan's insights left a strong impression on Ojas. He was especially struck by the favourable capital gains tax treatment and how significantly it could improve his returns. The strategy seemed like an effective tool to adopt for retirement planning, and he made a mental note to share this valuable tip with his is a hypothetical case. Suresh Sadagopan is managing director & principal officer at Ladder7 Wealth Planners and author of 'If God Was Your Financial Planner'.
