Most of the time senior citizens park their retirement savings in risk-free zones. They don't want to risk their savings in unknown territory. For a safe bet, they deposit their money in the post office, government-related schemes, or go for fixed deposit schemes to get a regular income after their retirement. 

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LIC Pradhan Mantri Vaya Vandana Yojana (PMVVY) and Senior Citizen Savings Scheme (SCSS) are such policies that assure higher fixed interest to senior citizens. It might be confusing for pensioners to choose between PMVVY and SCSS. Let’s understand PMVVY and SCSS in detail to get a better understanding.  

LIC Pradhan Mantri Vaya Vandana Yojana is a pension scheme for senior citizens, above 60 years of age that assures guaranteed pension for 10 years. The Centre launched LIC Pradhan Mantri Vaya Vandana Yojana last year in May.  As per the terms and conditions under this plan, the guaranteed rates of pension for policies sold during a year will be reviewed and decided at the beginning of each year by the Ministry of Finance.   

On the other hand, Senior Citizen Savings Scheme (SCSS) is a government-backed retirement benefits programme. The aim of the scheme is to help senior citizens by ensuring a regular flow of income post retirement. It guarantees returns on a quarterly basis. One can avail SCSS through certified banks and post offices in India.  

Interest Rate  

In the PMVVY, for the first fiscal year, the scheme assures an interest income rate at 7.4 per cent per annum payable monthly. On the other hand, SCSS is offering a rate of 7.4 per cent per annum for the current April-June quarter.  

Tenure 

For the PMVVY, the assured rate of pension shall be payable for the full policy term of 10 years for all the policies purchased till 31 March 2022. The loan facility is also available after the completion of 3 policy years. The maximum loan that can be granted up to 75 per cent of the purchase price. While for the SCSS, the investment period is 5 years, with an option to extend it for 3 more years.

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Benefits 

For the PMVVY, the minimum pension includes Rs 1,000 per month; Rs 3,000 per quarter; Rs 6,000 per half-year; and Rs 12,000 per year, whereas the maximum pension includes Rs 9,250 per month; Rs 27,750 per quarter; Rs 55,500 per half-year; and Rs 1,11,000 per year. However, the total amount of purchase price under the plan allowed to a senior citizen shall not exceed Rs 15 lakh. However, age is the biggest criteria here. A person, who has attained a minimum age of 60 years, can only buy this policy. On the other hand, the SCSS is a safe and reliable investment. Gives high returns if compared to FD or savings account, and on the same time, it provides tax benefit of up to Rs 1.5 lakh.  

Verdict

Both the PMVVY and SCSS schemes currently offer 7.4 per cent interest rate. The lock-in period in the PMVVY in for the entire 10-year tenure once you buy it. In SCSS the investment period is 5 years and can be extended.  So, depending on your requirement, you decide which one will suit you better!