All about Senior citizen savings scheme: Benefits and Interest Rates
Today we live in era of declining interest rates. Saving Interest rates
have come down in last 5 years and will continue to head southward. On other
hand expenses are on rise, be it healthcare cost or living expense. In this
backdrop, the avenues which offers guaranteed rates are decreasing and that too
with high rates are becoming limited.
One of the simplest schemes wherein senior citizens can invest their
retirement corpus is “Senior Citizen Saving Scheme (SCSS)”. Its current
interest rate makes it a compelling investment vehicle for conservative
investor who wants guaranteed returns.
Eligibility
- A Senior Citizen Saving Scheme (SCSS) account can be opened by an individual who have attained the age of 60 as on date of account opening.
- An individual who attained the age of 55 years or more and has retired either on superannuation or under a voluntary or special voluntary scheme is also eligible. However such account can only be opened within one month of receipt retirement benefits and amount invested can’t exceed the amount of retirement benefits.
- For Defense personnel (excluding civilian defense employees), the retirement rule has been lowered to 50 years on date of account opening.
- HUFs and NRIs are not allowed to invest in this scheme.
Investment limit
An individual can invest a
maximum amount of Rs 15 lakhs under single holding or jointly. The investment must be done in multiples of
Rs 1,000. As stated earlier, the individual can invest either Rs 15 lakhs or
the amount received as a retirement benefit whichever is lower. If the
investment amount is more than Rs 1 lakh then account must be opened by cheque.
Below this limit depositor may deposit in cash
Benefits
Interest of 8.3% is payable quarterly
at present. Guaranteed pay-outs is the biggest selling point of this scheme. The
rate of interest is subject to revision each quarter.
Where to open SCSS account?
You can open Senior Citizen
Savings Scheme in either in post office or banks mentioned below.
Allahabad Bank 2. Andhra
bank 3. Bank of Maharashtra 4. Bank of Baroda 5. Bank of
India 6. Corporation Bank 7. Canara Bank 8. Central Bank of
India 9. Dena Bank 10. IDBI Bank 11. Indian Bank 12. Indian
Overseas Bank 13. Punjab National Bank 14. State Bank of
India 15. Syndicate Bank 16. UCO Bank 17. Union Bank of
India 18. Vijaya Bank 19. ICICI Bank
How to open SCSS account / list
of document needed
- Duly filled application form, available at the post office or respective bank
- Know Your Customer (KYC) form
- Photographs of the applicant/s
- Permanent Account Number (PAN)
- Aadhaar Card
- Address proof
- Age proof
- In the case of retirees,
- Certificate from the employer, stating the retirement was on superannuation or otherwise and amount of retirement benefits
- Proof of date of disbursal of the retirement benefits
Post opening of account, the depositor is
given a passbook, which includes details like the date of opening, the account
number, the depositor's details, the amount deposited, dates and amount of the
quarterly interest payable, maturity date / amount and nomination details. Nominations can be
changed post account opening.
Tenure
of the scheme
The tenure of the Senior Citizen Savings scheme
is five years, which can be further extended for 3 more years. The interest is
calculated quarterly.
Prematurely withdraws are allowed only after one year. The charges are 1.5% of the deposit in withdrawal made before 2 years and post that charges are 1%.
Note, there is no penalty levied if premature closure is due to death of the depositor
Prematurely withdraws are allowed only after one year. The charges are 1.5% of the deposit in withdrawal made before 2 years and post that charges are 1%.
Note, there is no penalty levied if premature closure is due to death of the depositor
Taxation
Investment in SCSS qualify under
section 80C which means investment of Rs 1.5 Lakhs can be done in one FY so
that it qualify for tax breaks.
The interest payable is taxable
in the hand of investor at marginal tax rate applicable to him. From current FY
for senior citizens upto Rs 50000 deduction is allowed in respect of interest
income. If the total income is within this prescribed limit, one should provide
a 15H declaration to avoid TDS.
About Us:
We are a neo advisory firm that believes in Goal based investment. We offer investment services in Mutual Funds and also retirement/ Life insurance solutions. We have over a decade experience in finance sector. For any clarification / investment needs call us on 9325295502. We provide services across India. Also visit us on www.growwealthadvisors.com
We are a neo advisory firm that believes in Goal based investment. We offer investment services in Mutual Funds and also retirement/ Life insurance solutions. We have over a decade experience in finance sector. For any clarification / investment needs call us on 9325295502. We provide services across India. Also visit us on www.growwealthadvisors.com
We are now on Instagram. Visit us on www.instagram.com/growwealthadvisors/
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