If you are a senior citizen (above 60 years) and wants a regular stream of income and tax saving benefits, the Senior Citizens Savings Scheme (SCSS) is the scheme you should consider. It is a government-backed retirement benefits programme, in which senior citizens can invest a lump sum amount and get regular income during the retirement life. Here’re details about the scheme:
What Is Senior Citizens Savings Scheme?
It is a government retirement saving scheme that helps senior citizens receive quarterly interest payments along with tax benefits. It has a 5-year maturity period that can be extended up to an additional 8-year period. It’s one of the small savings schemes.
Returns On The Scheme
The Senior Citizens Savings Scheme is one of the highest interest-paying small savings schemes. The government recently kept interest rates unchanged on small savings schemes. The interest rate on SCSS stands at 7.4 per cent. This interest rate also beats the current level of inflation, which stands at 7.04 per cent, and is higher than the interest rates offered by various banks on fixed deposits.
For instance, Punjab National Bank (PNB) offers interest rates in the range of 3.50-5.75 per cent to senior citizens, depending upon the duration of deposits. IDFC First Bank offers FD interest rates to senior citizens in the range of 4.00-6.50 per cent. India’s largest private sector lender HDFC Bank offers 3.00-6.50 per cent interest rates. These interest rates are for deposits below Rs 2 crore.
Who Can Open SCSS Account: Features, Eligibility
An individual who has attained the age of 60 years and above can open this account. It can be opened at any bank or post office singly or jointly with the spouse. A person who has attained the age of 55 years or more but less than 60 years and who has retired on superannuation or otherwise on the date of opening an account can also open this account. The retired personnel of Defence Services attaining the age of 50 years. NRIs and Hindu Undivided Family (HUF) are not eligible to open this account.
The Senior Citizens Savings Scheme account will be opened with a minimum deposit of Rs 1,000 or any sum in multiple of Rs 1,000 not exceeding Rs 15 lakh. It has a 5-year maturity period that can be extended for three more years. The whole amount of deposit in a joint account shall be attributable to the first account holder only.
Both the spouses can open single account and joint accounts with each other. The depositor may nominate a person or more than one person. Nomination made by the depositor can be cancelled or varied.
The deposit made at the time of opening of the account shall be paid on or after the expiry of five years or after the expiry of eight years where the account was extended from the date of the opening of the account. Multiple withdrawals from an account shall not be permitted.
If the interest payable every quarter is not claimed by an account holder, such interest shall not earn additional interest.
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