Can a Senior Citizen Invest in Both SCSS and PMVVY?

Hey Friend,

My father asked, “can I invest in both SCSS and PMVVY?” after his retirement. I started my research about the same. I would like to share my thoughts and would highly appreciate it if you guys share your thoughts in the comments below. Due to a drop in interest rates offered by banks on fixed deposits, senior citizens frequently search for risk-free alternative investment possibilities. The government-sponsored Pradhan Mantri Vaya Vandana Yojana (PMVVY) and the Senior Citizen Savings Scheme (SCSS) are the two finest possible investment opportunities for senior citizens.

SCSS and PMVVY investments are open to seniors 60 years of age and older. Each scheme allows for a maximum investment of Rs 15 lakh. But there are differences between the two plans.

Hence, I hope this clarifies your doubt about investing in PMVVY and SCSS together.

• The investment made in the SCSS programme has a five-year maturity period. It may also be extended to a three-year period. The maturity time, however, for the PMVVY programme is ten years.

• A 7.4% annual return is provided by PMVVY. The interest rate may change quarterly in SCSS, though. SCSS also provides a 7.4% interest rate for the quarter of 2021 that runs from October through November and December. Consequently, these programmes offer higher returns than fixed deposits held in banks (5 percent -6 percent per annum).

• Investors in the SCSS programme get regular payments in the form of quarterly pensions. Investors in the PMVVY scheme might earn income on a monthly, quarterly, semi-annual, or annual basis.

• Under Section 80C, contributions to the SCSS scheme are tax deductible up to Rs 1.5 lakh. The PMVVY programme does not offer any tax advantages for investment. Additionally, neither scheme is immune from taxes on income received after maturity.

• Withdrawing funds from the PMVVY programme prior to its 10-year maturity is challenging. Investors may, however, incur a penalty to withdraw money from the SCSS scheme prior to the five-year maturity period.

The SCSS scheme is superior to PMVVY in terms of taxation and liquidity. The PMVVY programme, however, continues to offer a return of 7.4% over the course of the policy. In contrast, depending on the quarterly return rates set by the government, the SCSS scheme's return may change. I think one should make investments depending on their intentions or financial objectives.

I would like to conclude here as I believe this suffices your query about “can I invest in both SCSS and PMVVY?”

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Hi,

I was going through your answer, about whether “can I invest in both SCSS and PMVVY?” My father invests in the SCSS scheme and we think that the diversion of Rs 15 lakh investment option from PMVVY in SCSS is beneficial for senior citizens.

• While PM Vaya Vandana Yojana was providing an interest rate of 7.4% per year with a monthly payout option, Senior Citizen Savings Scheme offers an interest rate of 8% per year with quarterly payouts.

• The Senior Citizen Savings Scheme has a five-year term, which is half that of PMVVY.

• Furthermore, Section 80 C of the Income Tax Act, 1961 allows elderly citizens to deduct up to Rs 1.5 lakh from their taxes for investments made in SCSS. On the other hand, if you wish to reduce your income tax, investments in the Pradhan Mantri Vaya Vandana are not eligible for a deduction.

When you are considering whether can I invest 15 lakhs each in SCSS and PMVVY, it is important to note these benefits before making any kind of investment.

I usually manage my father’s finances and taxes. I wanted my father to invest in the SCSS, and PMVVY schemes. By investing in both SCSS and PMVVY, one can diversify their investment portfolio and enjoy the benefits offered by both schemes while securing a stable income during their retirement years. I got to know that the upper limit to invest in both these schemes was Rs. 15 lakh, but there was certain modification as per the budget of 2023. So before informing my father to invest in these schemes, I wanted to see whether can a senior citizen invest 15 lakhs each in SCSS and PMVVY?

Can I invest 15 lakhs each in SCSS and PMVVY?

A few months back I was going through a newspaper and discovered that as per the budget 2023 announcement;

• The SCSS investment cap was increased to Rs. 30 lakh, while the Pradhan Mantri Vaya Vandana Yojana, another well-known retirement programme, was scheduled to end on March 31, 2023.

• Senior citizens were able to deposit Rs. 15 lakh in each of these schemes till March 31, 2023, but starting on April 1, 2023, they can deposit an additional Rs 15 lakh in SCSS, which makes its investment limit 30 lakhs.  

• Even if PMVVY is not extended, the overall investment in senior citizen-focused schemes will remain at Rs 30 lakh after March 31, 2023, the same as it was before.

After understanding can PMVVY and SCSS together investment is possible or not, I really want to know the benefits in investing in the SCSS scheme as opposed to the PMVVY one. Thanks in advance.

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Getting older presents significant problems in life both financially and physically. Because of this, some individuals advise that you should protect your future at the right moment so that you can live your senior years stress-free. Any senior citizen who is looking for a steady pension scheme should acquaint themselves with PMVVY scheme details and SCSS scheme. Let me share what I know on the subject here.

What is the PMVVY scheme?

The Government of India has introduced the Pradhan Mantri Vaya Vandana Yojana, a non-participating, non-linked pension program. The updated plan includes increased pension rates and a three-year extension of the policy's sale period, starting with the financial year 2020–21 and ending on March 31, 2023. The interest on the loan provided by Pradhan Mantri Vaya Vandana Yojana would be deducted from the pension payment due under the plan. The IRDAI should have approved options on which to base the relevant rate of interest.

Can a senior citizen open both SCSS and PMVVY?

Yes, elderly citizens have access to the Small Savings Programs of the PM Vaya Vandana Yojana (PMVVY) and Senior Citizen Savings Scheme (SCSS). This is what I wanted to tell you about: can PMVVY and SCSS together work or not? Also, if you and your spouse are both over 60, you can both put your money in these two plans to benefit from regular, dependable income at competitive interest rates. Can I invest both SCSS and PMVVY must be clear to you now.

What is the PMVVY interest rate?

For the financial year 2022–2023, the PMVVY system would provide a guaranteed pension of 7.40% p.a., payable monthly. For all plans purchased between March 31, 2023, this guaranteed rate of pension will be due for the full ten-year policy period.

PMVVY scheme details and SCSS details must be clear to you now.