Can a couple where the husband is aged 62 but wife is 55 open a joint Senior Citizens’ Savings Scheme Account and invest up to ₹30 lakh?
K Mohan
As per Senior Citizens’ Savings Scheme Rules 2019, an individual who has attained the age of sixty years as on the date of opening the account can sign up for the scheme. This account can be opened in an individual capacity or jointly with one’s spouse. In case of a joint account, only the age of the first account holder will be considered to determine eligibility. There is no age limit for the second applicant. Hence, you can go ahead and open the joint account at the nearest post office or with any of the banks offering the same.
However, there are a few points worth noting in case of joint accounts. One, the rules say that the entire amount deposited in the joint account is attributable to the first account holder only. So, in your case, the quarterly interest payout on the scheme may be credited entirely into your savings account only. Secondly, in the unfortunate event of your demise, your spouse can continue this jointly opened account only if she meets the eligibility conditions of the scheme — chiefly, the qualifying age of 60 years — at that point in time. Three, even in a joint account, the maximum amount that can be invested is only ₹15 lakh. This is unlike the post office Monthly Income Scheme where, in a single account, you can invest ₹4.5 lakh and in a joint account you are eligible to put in ₹9 lakh.
But if you are keen on investing ₹30 lakh, apart from the joint account, you can open an individual account in your name and deposit another ₹15 lakh in that.
Is the National Pension Scheme similar to mutual funds in terms of risk to capital preservation? Are there any additional safety measures built into NPS, when compared to mutual funds managed by same NPS fund managers, from a capital preservation perspective?
Navaneeth KP
Like mutual funds, NPS funds too are market-linked products. Hence, capital preservation is not a given. However, considering the long lock-in for NPS, the risk to capital erosion is reduced. The PFRDA (Pension Fund Regulatory Development Authority) lays out investment guidelines for Schemes E (equity), C (corporate bond), and Scheme G (government securities) and Scheme A (Alternative assets) under NPS. These guidelines are revised from time to time. NPS funds hence have to follow these guidelines when investing and cannot be totally out of sync.
As per the latest guidelines issued in July 2021 for the All Citizen model of the NPS, Scheme E, for instance, can invest only in the top 200 stocks in terms of full market capitalisation as at the time of investment, in ETFs or index funds that replicate the Sensex or Nifty 50, in active equity mutual funds (up to 5 per cent of the total portfolio of the NPS fund), or in ETFs constructed for disinvestment (like the CPSE ETF, for example). Recent changes have also allowed investments in IPOs which has attracted criticism, given that they can be risky bets.
There are similar guidelines available for Schemes C, G and A as well.
Just like how a mutual fund investor would choose his funds from the various categories available on the debt and equity side based on his risk appetite, NPS investors can also choose the combination of schemes E, C and G ( we do not recommend scheme A yet) in their portfolio based on their risk appetite. If you have a high risk appetite, under the ‘active’ choice, you can invest a maximum of 75 per cent in Scheme E up to 50 years of age. Under the ‘auto’ choice, equity exposure comes down automatically after 35 years of age, until you retire.
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