When it comes to safe and stable investments in India, PPF, SCSS, and POMIS are often top picks — and for good reason. These government-backed savings schemes offer not only guaranteed returns but also varying levels of regular income, making them especially attractive for retirees, conservative investors, and anyone looking for reliable earnings without taking on high risk.
Whether you’re planning your retirement, managing a senior family member’s finances, or just trying to make smart choices with your savings, understanding the rules of PPF, SCSS, and POMIS can help you make informed decisions and get the most out of your money.
PPF, SCSS, and POMIS Schemes for Regular Income
| Feature | Public Provident Fund (PPF) | Senior Citizens Savings Scheme (SCSS) | Post Office Monthly Income Scheme (POMIS) |
|---|---|---|---|
| Current Interest Rate (Q1 FY 2024-25) | 7.1% p.a. (compounded yearly) | 8.2% p.a. (paid quarterly) | 7.4% p.a. (paid monthly) |
| Tenure | 15 years (extendable) | 5 years (extendable by 3 years) | 5 years |
| Minimum Investment | ₹500/year | ₹1,000 | ₹1,000 |
| Maximum Investment | ₹1.5 lakh/year | ₹30 lakh | ₹9 lakh (single), ₹15 lakh (joint) |
| Tax Benefits | 80C + tax-free interest | 80C deduction, interest taxable | No tax benefits |
| Income Frequency | Lump sum at maturity | Quarterly payouts | Monthly payouts |
Whether you need monthly payouts, quarterly interest, or a tax-free retirement corpus, PPF, SCSS, and POMIS offer something valuable for everyone. They are backed by the government, easy to manage, and provide peace of mind in uncertain markets.
SCSS is ideal for senior citizens, POMIS is perfect for fixed monthly income, and PPF remains a solid long-term investment for wealth creation with tax savings. The smartest approach? Mix and match these schemes based on your goals and stage in life. A well-diversified portfolio including all three can help balance income, growth, and safety.
What is PPF, SCSS, and POMIS? A Friendly Overview
Let’s break down these three schemes in simple terms:
Public Provident Fund (PPF)
The Public Provident Fund (PPF) is one of India’s most popular long-term investment tools. It’s designed for individuals looking to save regularly and build a large corpus over time — all while enjoying tax-free interest.
- Who is it for? Anyone — salaried, self-employed, or even homemakers. You only need an Indian residential status to open a PPF account.
- Returns: The current interest rate is 7.1% per annum, compounded yearly. The government revises this quarterly.
- Income Type: No regular payouts — you receive the full amount (principal + interest) at maturity.
- Safety: Backed by the Government of India. It’s as safe as it gets.
Senior Citizens Savings Scheme (SCSS)
Tailored for individuals aged 60 years and above, the SCSS is a superb option for retirees who want quarterly payouts from their savings. It is available through Post Offices and banks.
- Eligibility: Must be 60+ years old. Retired government or PSU employees aged 55–60 can also invest within one month of retirement.
- Returns: Offers 8.2% per annum, paid quarterly. One of the highest returns for a safe scheme.
- Taxation: Deposits are eligible for Section 80C deductions, but the interest earned is taxable.
Post Office Monthly Income Scheme (POMIS)
The POMIS is ideal for individuals who want monthly income with capital safety. It’s especially useful for homemakers, low-risk investors, or those looking to supplement a pension.
- Returns: Fixed 7.4% per annum, paid every month.
- Limits: ₹9 lakh for a single account, ₹15 lakh for a joint account.
- Maturity: 5 years, with premature withdrawal allowed (with penalty).
see also: Senior Citizen FD Scheme: Earn Up to ₹26,000 Interest on ₹1 Lakh Investment
How to Choose the Right Scheme for Regular Income
Let’s say you’re planning how to invest ₹15 lakh safely and want regular income. Here’s how these schemes can help:
For Monthly Income — Go with POMIS
If you want a guaranteed payout every month, POMIS is your best bet.
- Invest ₹15 lakh (joint account) → Monthly income = ~₹9,250.
- After 5 years, you get your full ₹15 lakh back.
This is great for retirees or homemakers who need fixed cash flow.
For Quarterly Income — SCSS Works Best
Want higher interest and can manage with quarterly payments? SCSS delivers both.
- ₹15 lakh invested → Quarterly payout = ~₹30,750.
- Interest rate of 8.2% beats most bank FDs.
Note: You must be a senior citizen or retired PSU/Govt employee to open SCSS.
For Tax-Free Growth — Use PPF for the Long Term
If you’re not looking for immediate income, but rather wealth accumulation, PPF is your go-to.
- ₹1.5 lakh/year for 15 years → ~₹40 lakh corpus.
- Interest is completely tax-free, unlike SCSS or POMIS.
Great for retirement planning or building a tax-free nest egg.
Step-by-Step Guide to Investing in PPF, SCSS, and POMIS
How to Open a PPF Account
- Visit your nearest Post Office or nationalized bank (like SBI, PNB, etc.).
- Fill the PPF Account Opening Form (Form A).
- Submit KYC documents – Aadhaar, PAN, passport photo.
- Start with a minimum deposit of ₹500.
You can also open a PPF account online via internet banking (for some banks).
How to Start SCSS
- Visit your bank or post office with proof of age.
- Fill SCSS account form and provide cheque/DD.
- Choose your quarterly interest payout option.
- Start with a minimum of ₹1,000.
You can transfer money directly from your retirement corpus.
How to Enroll in POMIS
- Open an account at a Post Office.
- Fill in the POMIS form with a nominee.
- Start with at least ₹1,000.
- Opt for a monthly interest payout to your linked savings account.
What Experts Say About These Schemes
Financial experts often recommend SCSS and POMIS to retirees because they provide a predictable income stream with virtually zero risk.
- PPF, meanwhile, is widely regarded as one of the best tax-saving options for long-term goals.
- These schemes are often used as part of a diversified retirement plan, alongside mutual funds and fixed deposits.
According to Harsh Roongta, financial advisor and founder of FeeOnlyInvestmentAdvisors.com:
“For conservative investors, a combination of SCSS and POMIS can ensure both stability and regular returns.”
see also: Even People with the Worst CIBIL Score Can Get This Credit Card
PPF, SCSS, and POMIS FAQs
Q1. Can I invest in all three — PPF, SCSS, and POMIS — at the same time?
Yes. You can invest in all three simultaneously as they serve different financial purposes and come with separate limits.
Q2. Is the interest from SCSS and POMIS taxable?
Yes. Interest earned is taxable and may be subject to TDS if it exceeds certain thresholds.
Q3. Can NRIs invest in these schemes?
No. NRIs are not eligible to open new PPF, SCSS, or POMIS accounts.
Q4. What happens if I withdraw money early?
Each scheme has its own penalty clause:
- PPF: Partial withdrawal after 7 years.
- SCSS: 1–1.5% penalty on principal if closed before 5 years.
- POMIS: 1–2% penalty on premature withdrawal.
Q5. Can these schemes beat inflation?
PPF and SCSS have done a good job of staying ahead of inflation historically, especially when compared to regular FDs. POMIS offers decent protection but may lag during high-inflation periods.
