The Senior Citizen Savings Scheme is a government-sponsored scheme, which is specifically designed to financially secure the life of the senior citizens of the country after retirement. The scheme provides the advantage of regular income along with the benefit of tax saving and safety. As one of the remunerative choices of investment it is one of the best choices of investment for those over 60 years of age.Read more
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As one of the safest options of investment, SCSS offers an interest rate of 7.4%. This is considered as the highest interest rate among small savings schemes in India. Read further to know more about the Senior Citizen Saving Plan.
For senior citizens who are above 60 years of age and who want to gain the regular flow of income, investing in SCSS is the right choice. As an effective long-term saving option Senior Citizen Saving Plan offers security and benefits that are associated with any government-backed savings scheme. This scheme is available through the post-offices and certified banks across India.
The following are the eligibility criteria for the senior citizen savings scheme.
Individuals above 60 years of age can apply for this scheme
Any defense person who is retired and has a minimum age of 50 years can opt for the SCSS.
People who have opted for the Voluntary Retirement Scheme (VRS) or superannuation between the age bracket of 55 years-60 years can invest in this scheme. Provided, investment should be done within 1 month from receiving the retirement benefit.
The SCSS is not applicable to NRIs and HUFs.
As compared to the other short term saving schemes available in India, the Senior Citizen Savings Scheme offers a higher interest rate of 7.4%. The interest rate of SCSS is regulated quarterly by the Ministry of Finance. Let’s take a look at the historic interest rates of SCSS.
|Time Period||Rate of Interest (% annually)|
|April to June (FY 2020-21)||7.4|
|Jan to March (FY 2019-20)||8.6|
|Oct to Dec 2019 (FY 2019-20)||8.6|
|Jul to Sep 2019 (FY 2019-20)||8.6|
|Apr to Jun 2019 (FY 2019-20)||8.7|
|Jan to March 2019 (FY 2018-19)||8.7|
|Oct to Dec 2018 (FY 2018-19)||8.7|
|Jul to Sep 2018 (FY 2018-19)||8.3|
|Apr to Jun 2018 (FY 2018-19)||8.3|
|Jan to March 2018 (FY 2017-18)||8.3|
|Oct to Dec 2017 (FY 2017-18)||8.3|
|Jul to Sep 2017 (FY 2017-18)||8.3|
|Apr to Jun 2017 (FY 2017-18)||8.4|
Senior Citizen Savings Scheme offers investment up to Rs.15 lakhs individual or jointly into the account (in multiples of Rs.1000). the amount invested in the scheme should be lower than the amount received on retirement. Thus, the subscriber can invest either the amount received as a retirement benefit or Rs.15 lakh whichever is lower. The senior citizens can open the account by making cash payment for an amount less than Rs.1 lakh or can make a contribution of above Rs.1 Lakh by using cheque and demand draft.
Let’s take a look at some of the benefits offered by the senior citizen savings scheme.
As a government-sponsored investment scheme, SCSS is considered as one of the most reliable and safest options of investment available for senior citizens in the country.
The process to open the account is very simple and hassle-free. The subscriber can open the SCSS account at any authorized bank or post-offices across the country. The account can also be transferred across India.
As compared to the other savings schemes like FDs, SCSS offers a higher interest rate of 7.4%.
The benefit of tax exemption can be availed on the contribution made up to the maximum limit of Rs.1.5 lakh under section 80C of the Income Tax Act.
The facility to select a beneficiary is offered at the time of opening the senior citizen savings scheme account. To choose a nominee of the scheme the applicant will have to submit an application as a part of Form C to the bank or post-office along with the passbook.
Senior Citizen Savings Scheme offers flexibility in terms of the investment period, as the average tenure of the policy is 5 years, which can be further exceeded up to 3 years.
Now that we know the interest rate and benefits offered by the Senior Citizen Savings Scheme. Let’s take a look at the process to open the SCSS account.
The Senior Citizen Savings Scheme can be opened easily in any authorized bank or post-office in India. However, to open the account the individual will need to fill the appropriate form along with the required documents.
Fill Form A to open the SCSS account.
The Applicant will require to submit the identity proof like Passport, PAN Card, Aadhar Card.
Submit the Address proof like Aadhar Card, Telephone bill, etc.
The subscriber will need to submit the documents validating the age like birth certificate, voter ID, PAN, etc.
2 passport size photograph.
It is important to keep in mind that all the above documents should be self-attested.
Senior Citizen Savings Scheme offers a term period of 5 years, which can be extended up to 3 years. To extend the scheme for 3 years the subscribers need to submit thoroughly filled Form B to the bank or post-office for the extension of the scheme. Only one extension is applicable under the scheme. Moreover, the investors can also close the account without giving any penalty after completion of 1 year of the extension.
SCSS allows premature withdrawals after completion of 1 year of opening the account. However, penalties are applicable in case the account is closed after 1 year but before the end of 2 years.
5% of the deposited amount is deducted as a penalty, if the person exists the scheme before completion of 2 years from the date of opening the account.
1% of the deposited amount is deducted as a penalty if the person exists the scheme between 2 years to less than 5 years from the date of opening the account.
Let’s take a look at the list of public sector banks that offers the facility to open a Senior Citizen’s Savings Scheme account –
State Bank of India
Bank of Maharashtra
Bank of Baroda
Bank of India
Central Bank of India
Union Bank of India
Indian Overseas Bank
Punjab National Bank
United Bank of India
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