A Senior Citizens Savings Scheme (SCSS) account is a retirement-benefits account that is supported by the Indian government. Indian senior citizens who invest a lump sum in the plan, either individually or jointly, can take advantage of the account's benefits. The account will offer income tax advantages in addition to access to regular income after retirement. Senior Citizens Savings Schemes can be availed by any individual above the age of 60 years.
They are effective savings options for the long term and offer attractive features and unmatched security.
SCSS Information
Tenure -5 years
Interest Rate -8.2% p.a.
Investment Amount -Maximum amount that can be deposited is Rs.30 lakh
Premature Withdrawal -Allowed
Process to Open an SCSS Account
An SCSS account can be opened at a bank or a post office. The process to open an SCSS account is mentioned below:
Visit the nearest post office or bank branch.
Submit the application form along with the KYC documents.
A cheque for the amount that is being deposited must be provided.
You can add nominees to the account.
SCSS Eligibility
The eligibility criteria for the SCSS are mentioned below:
An individual who has attained the age of 60 years or above at the time of opening an SCSS account.
Individuals who have reached the age of 55 years old but are below the age of 60 years old and have retired on superannuation are eligible to open an SCSS account.
Individuals who have attained the age of 55 years old and have retired before the implementation of the SCSS rules are eligible under the scheme.
Non-Resident Indians (NRIs) are not eligible to open an SCSS account.
Hindu Undivided Families (HUF) are not eligible to open an SCSS account as well.
SCSS Interest Rate
Currently, the SCSS interest rate is 8.2% p.a. The returns of the SCSS are high when compared to savings and Fixed Deposit (FD) accounts. On the first instance, the interest is payable on the deposit date of March 31, September 30, and December 31, thereafter, interest is payable on March 31, June 30, September 30, and December 31.
Quarterly interest is paid on the initial working day of April, July, October, and January. However, quarterly interest payments are available only at Core Banking enabled post offices.
Documents required to open SCSS account
Given below are the documents that individuals must submit in order to open an SCSS account:
Two passport-size photographs
Form A must be completely filled in and submitted.
Identity proof such as Passport or Permanent Account Number (PAN) Card must be submitted.
Individuals must submit proof of address such as Aadhaar Card or telephone bill.
A document confirming the individual's age must be submitted. Age proof document can be the PAN Card, Voter ID, Birth Certificate, Senior Citizen Card, or Passport.
All the documents that are submitted to open an account must be self-attested.
SCSS Features
The main features of the Senior Citizens Savings Scheme are mentioned below:
Maturity of the scheme: The maturity period of the scheme is 5 years. However, individuals can extend the maturity duration for 3 years by submitting an application in the required format within one year of maturity of the account. However, the account can be closed without any charges after the expiry of the account.
Nominations: Nominations can be added to the policy at the time of opening an account or after the account has been opened.
Number of accounts: Individuals are allowed to operate more than one account by themselves or open a joint account with their spouse. However, joint accounts can be opened only with the spouse and the initial depositor is the investor of the joint account.
Minimum and maximum amount: Only a single deposit is allowed to be made in the account. It can be in the multiples of Rs.1,000 and the maximum amount that can be deposited is Rs.30 lakh. Deposit amounts less than Rs.1 lakh can be paid by cash, while amounts more than Rs.1 lakh must be paid by cheque. In the case of cheque payments, the date the cheque realises will be the opening date of the account.
Transfer of an account: An SCSS account can be transferred from a bank to a post office and vice versa. The process to open an SCSS account is also easy and hassle-free.
Premature withdrawal: After one year of opening the account, premature withdrawal is allowed. However, a 1.5% charge and a 1% charge of the total amount deposited will be charged in case of premature withdrawals after 1 year and 2 years, respectively.
Tax benefits under the SCSS
Under Section 80C of the Income Tax Act, 1961, individuals are eligible for tax deductions on investments up to Rs.1.5 lakh. In case the interest generated is more than Rs.10,000 p.a., the tax will be deducted at source.
List of banks that offer SCSS
Given below is the list of banks that of the scheme:
ICICI Bank
Union Bank of India
UCO Bank
Indian Bank
Punjab National Bank
IDBI Bank
Indian Overseas Bank
State Bank of India
Dena Bank
Central Bank of India
Source and for other details:https://www.bankbazaar.com/saving-schemes/senior-citizen-saving-scheme.html
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