The Senior Citizen Savings Scheme is a government-backed savings instrument. The investment option is eligible for tax deductions up to Rs 1.5 lakh under section 80C of the Income Tax Act, 1961.
Backed by the Central government, the Senior Citizen Savings Scheme (SCSS) provides individuals above 60 years with a steady and secure income source for their post-retirement phase. Any senior citizen can invest in this scheme. The SCSS is one of the most preferred options for senior citizens as it offers secured return. Introduced in 2004, the plan gives subscribers a low-risk investment alternative with guaranteed returns and tax benefits. Those willing to invest in the plan can do it through post offices or banks.
Here is everything you need to know about the Senior Citizen Savings Scheme, including the eligibility criteria, interest rate, and other important details.
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Senior Citizen Savings Scheme: Features
Fixed interest rate: The interest rate is fixed by the government and it remains the same throughout the investment tenure. The interest rate is unlikely to be affected by any sort of alterations or market fluctuations in a later quarter. The interest rate for SCSS currently has been fixed at 8.2 per cent.
Deposits: The scheme allows only a single deposit. Subscribers can put in money in multiples of Rs 1,000. The maximum amount that can be invested is Rs 30 lakh.
Maturity: The scheme’s maturity period is five years. It can be extended for three more years by submitting an application within one year of the maturity of the account.
Multiple accounts: Subscribers can operate more than one SCSS account or also open a joint account with their spouse.
Premature withdrawals: Investors can make early withdrawals from their SCSS after one year of account opening.
Tax benefit: SCSS deposits qualify for deduction of up to Rs 1.5 lakh under section 80C of the Income Tax Act, 1961.
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Senior Citizen Savings Scheme: Eligibility
1. Anyone who has attained the age of 60 or above is eligible to open an SCSS account.
2. Those who are between the ages of 55 and 60 and have retired on VRS, Special VRS or superannuation can also open an account under the scheme.
3. The subscriber must be an Indian citizen.
4. Retired defence personnel are also eligible to open an SCSS account, provided they fulfill other terms and conditions.
Senior Citizen Savings Scheme: Interest Rate
The present interest rate for the Senior Citizen Savings Scheme is 8.20 per cent. The returns on SCSS investment are higher when compared to other investments such as fixed deposits (FDs). The interest amount is credited quarterly and can be withdrawn through either ECS (Electronic Clearing Service) or auto credit mode through the post office.
How to apply for the Senior Citizen Savings Scheme?
One needs to visit the post office or the nearest bank branch that offers SCSS to submit an application for opening an account. Here is the step-by-step process.
1. Go to the bank or post office and ask for the SCSS application form.
2. Fill in all the necessary information such as name, address, age, employment and pension details, nominee details and others.
3. Include any necessary documentation with the application.
4. Hand over the application with the money to be deposited to the bank staff.
