Senior Citizen Savings Scheme vs PMVVY: Which is best for senior residents?

SCSS vs PMVVY: For a senior citizen, investing in risk-free instrument is most advisable. That why financial institution Fixed Deposit (FD) is among the most favoured funding choices among the many senior residents. But, the best way financial institution FD rate of interest has been nose-diving, the aged residents have began to have a look at different assured return choices like Senior Citizen Saving Scheme (SCSS). If a senior citizen is in search of an everyday month-to-month revenue then Pradhan Mantri Vaya Vandana Yojana (PMVVY) is one other good possibility for the 60 plus elders to park their cash. However, if we have a look at the professional opinion, in SCSS there’s extra liquidity whereas in PMVVY there’s an assured fastened month-to-month return obtainable for the investor. They suggested senior residents to have funding in each in order that one can have an assured and glued month-to-month revenue and on the similar time if there’s any monetary disaster, one can monetise one’s funding too.

Speaking on SCSS vs PMVVY Kartik Jhaveri, Director — Wealth Management at Transcend Consultants mentioned, “Both in PMVVY and SCSS, interest rate offered is 7.4 per cent. But, in SCSS, one’s interest rate may vary on the quarterly basis while in PMVVY, one’s interest rate is fixed at the time of investment for the entire investment period.” Jhaveri mentioned that in SCSS, funding interval is for 5 years whereas in PMVVY, the funding interval is 10 years.

Jhaveri went on so as to add that in PMVVY, one will get fastened month-to-month pension on the idea of annual rate of interest supplied on the time of funding. And in case the investor dies earlier than the maturity interval, the invested quantity or capital funding shall be refunded to the nominee of the investor. He mentioned that within the case of investor survives the ten funding interval, the capital funding shall be refunded to the investor.

“PMVVY is an LIC plan and as per the LIC website, PMVVY interest rate offered till 31st March 2022 is 7.4 per cent,” mentioned Jhaveri.

Advising buyers to have a look at the liquidity angle too SEBI registered tax and funding professional Jitendra Solanki mentioned, “In PMVVY, one can’t withdraw money before 10 years of maturity period while in the case of SCSS, an investor can withdraw money prematurely paying some penalty. Being a senior citizen, there can be some financial emergency coming in as post-retirement one’s avenue for income becomes limited. So, in my opinion, one should have a diversified investment in both SCSS and PMVVY so that one can have an assured monthly return plus an avenue to address the financial emergency arising in near future.”

Solanki additionally mentioned that in SCSS, one can begin investing after attaining the age of 55 years whereas in PMVVY one have to be 60 years of age to change into eligible for investing.

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