Senior Citizen Savings Scheme (SCSS) was launched in 2004 by the government of India in order to provide a guaranteed return to the senior citizens by means of safe investment. This scheme offers risk-free investment to the senior citizen. In order to get a regular income, Investing in SCSS is a very good opportunity for people who are above 60 years. It is a good long-term saving option that offers security at the old age.
Following are the documents required to open SCSS account:
One can open Senior Citizen Saving Scheme at any post office across India. There are also certain national and private banks that facilities the deposit of SCSS scheme.
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In SCSS account, a minimum investment amount should be of INR 1,000 and a maximum could be INR 15 lacs. The scheme allows only one deposit in the account and this shall be in multiples of INR 1,000. The amount invested in this scheme cannot exceed the money that has been received on retirement. Thus, an individual can invest either INR 15 lacs or the amount received as a retirement benefit (whichever is lower).
Even though the deposit is limited to only one time, a person can open multiple SCSS accounts, which is not in the case of PPF (wherein a person can only open one PPF account).
SCSS offers a quarterly interest payment while minimizing your taxes. The current SCSS interest rates for the year
2018 is 8.3 percent per year. The quarterly interest of SCSS is payable on 1st working day of April, July, October and January.
The tenure of SCSS is of 5 years. However, there is an option to extend the scheme further for three years. In order to extend the scheme, one has to submit the dully filled Form B (after the completion of 5 years), which is regarding the extension of the scheme. Such extension accounts can also be closed after a year without paying any penalty.
The premature withdrawals are allowed, but only after one year of account opening. On the account closure, before the end of two years, 1.5 percent of the deposit shall be deducted as pre-mature withdrawal charges. And, on the closure of the account after 2 years an amount equal to 1 percent of the deposit shall be deducted as charges.
No charged or penalty is levied for premature closure of the account in the event of death.
There are multiple benefits of opening a Senior Citizen Savings Scheme:
The interest earned on the deposit is fully taxable and tax is deducted at source (TDS) as per applicable Income Tax Rules. Although, is the income is not taxable, an individual has to provide 15H or 15G form so that no tax is deducted at source.
Following are the authorized banks where you can open an SCSS account:
|Authorized Banks for SCSS account|
|Bank of Maharashtra|
|Bank of Baroda|
|Bank of India|
|Central Bank of India|
|Indian Overseas Bank|
|Punjab National Bank|
|State Bank of India|
|State Bank of Mysore|
|State Bank of Bikaner and Jaipur|
|State Bank of Patiala|
|State Bank of Travancore|
|State Bank of Hyderabad|
|Union Bank of India|
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