Recently Govt launched Varishtha Pension Bima Yojana with much fanfare. I already wrote the features about the same in my previous post. However, few started to compare this scheme with Post Office Senior Citizen Savings Scheme (SCSS).
Therefore, in below image I am showing you the comparison of both products to make it clear how each product is different. In the plane, both products look similar. However, when looking at individual features then they are totally two different products meant for different purposes.
My concerns after comparison of two products are as below.
- You may face more interest rate risk to SCSS if in future interest rate goes down.
- Both products not meant if you consider inflation.
- Even though SCSS has some tax benefit, but the interest is taxable. Therefore, you may say not a big differentiator.
- TDS in SCSS makes a bit negative point. Because we have tendency to avoid tax than filing it and getting it right.
- Interest payout of SCSS is outdated as one need to open a savings account in the post. Whereas in case of Varishtha Pension Bima Yojana, you receive a pension in your account irrespective of the bank.
- In SCSS interest payout is quarterly but in case of Varishtha Pension Bima Yojana it is monthly. This makes attractive.
- SCSS is more liquid than Varishtha Pension Bima Yojana, with lesser penalty and period.
- One is a pension, which you expect from lifelong. Whereas SCSS need your monitoring like extending it before maturity or post maturity you need to think again which plan suites your need.
Hope above points makes you decide in choosing the right product between these two products.