SCSS vs MIS: Which can offer higher return on a Rs 7 lakh investment for 5 years? See calculations
Comparing the Senior Citizen Savings Scheme (SCSS) and Post Office Monthly Income Scheme (MIS) to determine which offers higher returns on a Rs 7 lakh investment for 5 years, with secure, government-backed payouts.
Choosing between the Senior Citizen Savings Scheme (SCSS) and Post Office Monthly Income Scheme (MIS) can be crucial for investors seeking low-risk, stable income. Both options provide secure, government-backed returns with regular payouts, but they differ in interest rates, payout frequencies, and deposit limits. This comparison explores a Rs 7 lakh investment over a 5-year period, detailing interest earnings, maturity amounts, and other essential features to help investors make an informed decision based on income needs and risk preferences.
(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning)
SCSS and MIS
Investing in the Senior Citizen Savings Scheme (SCSS) or Post Office Monthly Income Scheme (MIS) provides a secure, government-backed way to earn steady income with minimal risk. Both options offer regular payouts, making them ideal for low-risk, stable income seekers.
SCSS and MIS at a Glance
With a Rs 7 lakh investment, both SCSS and MIS ensure guaranteed returns with attractive interest rates. Here’s a breakdown:
SCSS
Quarterly payouts, designed for senior citizens, with an interest rate of 8.20%.
MIS
Monthly payouts with a 7.4% interest rate.
Both schemes are government-backed, providing a safe investment route for those seeking long-term returns without exposure to market fluctuations.
Features of SCSS
Deposit Limits:
- Minimum deposit: Rs 1,000, in multiples of Rs 1,000.
- Maximum investment: Rs 30 lakh (effective from April 1, 2023).
Account Options
- Separate single or joint accounts can be opened by spouses.
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In joint accounts, the deposit is attributed entirely to the first account holder.
In joint accounts, the deposit is attributed entirely to the first account holder.
Nomination Facility
Depositors can nominate one or more individuals, with the option to modify or cancel nominations anytime.
Withdrawal & Closure
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Early withdrawals are allowed but incur a penalty.
- Deposit payout is available after 5 or 8 years, depending on account extension.
Early withdrawals are allowed but incur a penalty.
Returns on Rs 7 Lakh Investment:
-
Maturity Amount: Rs 9,87,000
- Quarterly Interest Payout: Rs 14,350
- Total Interest Earned (5 years): Rs 2,87,000
Maturity Amount: Rs 9,87,000
Features of POMIS
Deposit Limits:
- Minimum deposit: Rs 1,000, in multiples of Rs 1,000.
- Maximum investment: Rs 9 lakh (single account) and Rs 15 lakh (joint accounts).
Interest Rate
Interest rate of 7.4% per annum, with monthly disbursement.
Lock-in Period
A 5-year lock-in period, with penalties for premature withdrawals based on withdrawal timing.
Returns on Rs 7 Lakh Investment:
Monthly Interest Payout: Rs 4,317