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Senior citizens are the essence of any country and to protect their needs, many schemes are launched by the Government. The Central Government has introduced many retirement and pension schemes for the benefit of senior citizens. One such scheme for the senior citizens of India is the Senior Citizen Savings Scheme (SCSS). This saving scheme offers a regular stream of income with tax-saving benefits. Senior citizen savings scheme is an apt choice of investment for senior citizens over 60 years of age.
Table of Contents
The Senior Citizen savings scheme or SCSS is a savings scheme sponsored by the Central Government to Indian residents over 60 years of age. This scheme was first introduced in the year 2004. The fundamental objective of the scheme is to provide financial support to retirees ensuring a regular flow of income. Interest is guaranteed in this investment and received quarterly.
The Senior citizen savings scheme deposit matures after five years from the date of opening of account but can be extended once by an additional three years. The interest rate for senior citizens savings scheme has been set at 8.6%. Amongst all the saving schemes in India, this scheme provides the highest rate of interest. Public or private sector banks and post offices offer this scheme. Since the central Government backs this scheme, the terms and conditions in the senior citizen savings scheme are the same, regardless of the post office or bank where investment is made.
To be eligible for the senior citizen Saving Scheme, an individual must fulfill the following criteria:
The Senior citizen savings application form is available in both online and offline mode. The participating public and private sector banks have the option of Senior citizen savings scheme form download from their official websites. You can download the form from the official website of India post office:
Alternatively, the form can be filled at designated branches of the participating banks in India.
The senior citizen savings scheme account cannot be opened from the online route. Hence after downloading the form, an individual must submit the printed copy of the form along with the supporting documents.
An individual can open this account in any of the post offices or authorized banks across India with the following documents:
Early withdrawal under the senior citizen savings scheme is permitted, but there are penalties applicable in such cases. The calculation about penalties is based on the time elapsed between the opening of the account and its withdrawal. The penalties on premature withdrawal are as follows:
There are three ways to close a senior citizen savings scheme:
The concerned deposit office pays the deposit made during the opening of account after the expiry of five years from the date of account opening.
If the depositor does not touch the account that is neither the account is closed nor it is extended then the account is closed by default and the payment is made from time to time till the end.
If before maturity the applicant dies before maturity of the account then the account shall be closed and the deposit will be refunded in Form F. The deposit is refunded along with the interest amount to the nominee or legal heirs.
As this scheme is backed by the Indian Government, it is considered to be one of the safest and most reliable investment options.
The process to open a Senior Citizens Savings Scheme account is simple. The account can be opened at any authorized bank or any post office in India. It is transferable across India.
The return rate at 8.6 % is excellent compared to a savings or Fixed Deposit account.
The Nomination facility is available during the time of opening of the account through applying part of Form C.
Tax deduction up to the amount Rs 1.5 lakh can be claimed under Section 80C of the Indian Income Tax Act, 1961.
The tenure of this scheme is compliant with an average time of 5 years which can be extended up to 3 additional years.
Investing in Senior citizen savings scheme is a good option for senior citizens above the age of 60 years to make money. This is a beneficial and long-term saving option which offers security and entails features that are usually associated with Government-backed savings or investment schemes. The scheme is available through different certified banks and post offices across India. You can contact Enterslice to know more about the tax-saving options and investment schemes to get a better return from income tax perspective.
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