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Hence it is better to have a complete idea about each investment scheme where we invest. Therefor this blog will help you to know end to end information of many Indian investment schemes available right Infront of you.
In this blog post I will be explaining my analysis on Senior Citizens Savings Scheme. This will be a complete guide on Senior Citizens Savings Scheme. Please read till end of the blog post to know the complete information about this Senior Citizens Savings Scheme. Lets get started.
Table of Contents
- What is Senior Citizens Savings Scheme (SCSS)?
- How does Senior Citizens Savings Schemes works ?
- Features of Senior Citizens Saving Scheme ?
- Where do you open the SCSS account ?
- Who can open the SCSS account ?
- What is the deposit limits of senior citizens savings scheme account?
- What is the maturity period of senior citizens savings scheme?
- Extension Period of SCSS
- What is the interest rate for senior citizens savings scheme ?
- How will you receive the interest ?
- Process for Premature Closure of SCSS account
- Nomination Facility of Senior Citizens Savings scheme account
- Income Tax Benefits of SCSS account
- Popular Bank Offerings Senior Citizens Savings Scheme
- Interest Earnings Projection Table
- FAQ About Senior Citizens Savings Scheme
What is Senior Citizens Savings Scheme (SCSS)?
This scheme is exclusively for Senior Citizens (aged 60 years or more). This scheme provides regular income on a quarterly basis. If you are a retired person and having some lumpsum amount with you then this is the best and risk free saving scheme for you to earn a regular quarterly income for yourself.
How does Senior Citizens Savings Schemes works ?
- You need to deposit a lump sum amount into your SCSS account.
- Every Quarter means every 3 months you will start receiving the interest till the end of your tenure.
- You will get back your deposited amount back at the end of your tenure.
Features of Senior Citizens Saving Scheme ?
- This Scheme is exclusively for Senior Citizens of India only.
- This scheme is Backed by the Government of India.
- This scheme provides Guaranteed returns.
- This scheme is a Safe investment option for eery senior citizens.
- This scheme gives you a regular quarterly income.
- You will have a peace of mind during your retirement life.
- You will be also getting lots of income tax benefits.
Where do you open the SCSS account ?
Senior Citizen saving scheme account can be opened in
- Post Office
- Nationalized banks
- Also in private sectors bank
Who can open the SCSS account ?
- Only Indian residents can open the account. An individual of the age of 60 years or more can open the account.
- An individual of the age of 55 years or more but less than 60 years and who has retired on superannuation or under VRS can also open account.
- The retired personnel of Defence Services (excluding civilian Defence employees) of the age of 50 years or more can open the account.
- Joint account can be opened with spouse only. First depositor in joint account is the investor.
- A depositor can open more than one account either individually or jointly with spouse.
- Any number of accounts can be opened. But, total investment in all the accounts should not exceed the maximum investment limit of Rs. 15 Lakhs.
What is the deposit limits of senior citizens savings scheme account?
- Minimum deposit amount is Rs. 1,000.
- Deposit amount should be in multiples of Rs. 1,000.
- Maximum deposit limit is Rs. 15 Lakhs.
What is the maturity period of senior citizens savings scheme?
- Maturity Period for this scheme is 5 Years.
Extension Period of SCSS
- After maturity, the account can be extended for further 3 years.
- Account can be extended within one year of maturity by giving application.
- During the extension period, account can be closed at any time after one year of extension without any deduction.
What is the interest rate for senior citizens savings scheme ?
- Current annual interest rate is 7.40%.
- Interest amount is paid on a quarterly basis. That means interest is paid at the end of Calendar quarter (31st March, 30th June, 30th Sept and 31st December).
- Interest rate (on the day of account opening) will remain the same throughout the tenure of SCSS. It will not change even if there are changes to the interest rate thereafter.
How will you receive the interest ?
You can receive quarterly interest in one of the following ways.
- Quarterly interest can be credited into Savings Bank (SB) Account present in the same deposit office.
- Quarterly interest of SCSS accounts present at CBS (Core Banking Solution) Post Offices can be credited in any Savings Bank (SB) Account present at any other CBS Post Offices.
- Money order
Process for Premature Closure of SCSS account
- If you close the account pre-maturely after 1 year, then 1.5% of the deposit amount will be deducted and you will receive the remaining amount.
- If you close the account pre-maturely after 2 years, then 1% of the deposit amount will be deducted and you will receive the remaining amount.
Nomination Facility of Senior Citizens Savings scheme account
- You can nominate either at the time of account opening or after opening the account but before maturity.
Income Tax Benefits of SCSS account
- Investment made in SCSS are also eligible for tax deductions in the following manner.
- The principal amount deposited in SCSS is eligible for a tax deduction of up to Rs. 1.5 Lakh per annum under section 80C of the Income Tax Act, 1961.
- Interest on SCSS is taxable as per the tax slab applicable to the person. In case the interest amount earned is more than Rs. 50,000 for a fiscal year, Tax Deducted at Source (TDS) is applicable to the interest earned. This limit for TDS deduction on SCSS investments is applicable from AY 2020-21 onwards.
Popular Bank Offerings Senior Citizens Savings Scheme
- ICICI Bank
- Bank of Baroda
- State Bank of India
- Canara Bank
- Punjab National Bank
- Union Bank of India
- Vijaya Bank
- UCO Bank
- Bank of India
- IDBI Bank
Interest Earnings Projection Table
|Deposited Amount||Interest Rates(%)||Deposited Period in Years||Quarterly interest pay out (INR)|
FAQ About Senior Citizens Savings Scheme
What is the Compounding Frequency of Senior citizen saving scheme?
Compound interest is not applicable in this scheme. Simple interest calculation is followed in this scheme.
Is there any Account Transfer faciality available in Senior citizen saving scheme?
SCSS account can be transferred from one deposit office to another deposit office.
What is the eligibility criteria of joint senior citizen saving account?
The age of first depositor is supposed to be above 60 years. However, there is no age limit for the second applicant. The joint account can be opened only with the spouse. However, the entire amount in a joint account will be attributable only to the first account holder.
What is the maximum age of senior citizen saving account opening?
Any individual, above the age of 60, can open a Senior citizen savings account.
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