Senior Citizen Savings Scheme : The most important aspect of the scheme is that the interest rate is very high. 7.4% interest rate is offered at the time of writing this scheme which gives second best interest rate of any scheme without any risk.
Senior Citizen Savings Scheme : As the name already suggests about this scheme Senior Citizen Savings Scheme (SCSS) is a scheme for senior citizens and was started by the Government of India in the year 2004. The main objective of this scheme is to provide financial assistance to the retirees. To ensure monthly flow of income. The interest payment will be fixed as well as quarterly. Senior Citizen Saving Scheme is the best scheme for those senior citizens who want to invest as well as save tax.
If you are 60 or 60+ then you want basic things from your investments which are security as well as regular income. And Senior Citizen Savings Scheme is the best way to fulfill these requirements. This will help you estimate taxable income as well. This scheme is processed by the Government of India and is completely safe.
Who Can Invest?
In this scheme any person who is an Indian citizen as well as who is above 60 years of age is able to invest in this scheme. The person who has taken premature retirement due to any reason is also eligible to invest in this scheme. This scheme is not for people who are not living in India and for Non-Resident Indians (NRIs) and Hindu Undivided Families (HUF).
Interest Rate
The most important aspect of the scheme is that the interest rate is very high. 7.4% interest rate is offered at the time of writing this scheme which gives second best interest rate of any scheme without any risk. There are also other schemes like Public Provident Fund (PPF) and National Savings Certificate (NSC) which are the best but offer interest rate of only 7.1%, and even less. And these plans are also a bit risky.
Tax benefits
Like some other schemes, you can deduct investment in Senior Citizen Savings Scheme from your taxable income but the maximum limit is Rs. 1.5 lakh and all these deductions are given under section 80C of the Income Tax Act. And all investments under this Act do not exceed this amount.
Interest payment
Under this scheme (Post Office SCSS Scheme) interest is calculated on quarterly basis and also credited to your bank account. The interest crediting dates in the account are April, July 1, October 1 and January 1.
Premature withdrawal
If a person wants to withdraw his amount after one year then he can do so. For this, the person will have to pay a charge of 1.5 percent of the deposit amount. And if you withdraw the amount after two years then you have to pay 1 percent of the deposit amount.
Benefits of Senior Citizen Savings Scheme
Since a plan is processed by the Government of India, it provides security as well as a guarantee of your investment. This plan also provides reasonable interest on your investment. The process of this scheme (Senior Citizen Savings Scheme) is very simple. You can easily open, operate and transfer SCSS account at authorized post office in India or bank. The tenure of this scheme (Bank SCSS Scheme) is five years and after its maturity you can extend it up to three years. But you can extend this time [duration only once.
How to open post office account for SCSS?
A person is able to open a Post Office Senior Citizen Savings Scheme account by visiting any post office in India. The amount of interest received under this scheme will be directly transferred to the post office account of the investor. SCSS account option is also available for Indians who are located in the most remote parts of the country as well.
How to open bank account for SCSS?
Apart from post offices, you are also able to open a SCSS account in select public or private sector banks. Here are the benefits of opening a Senior Citizen Savings Scheme account in authorized banks:
The interest amount can be directly transferred to the depositor’s savings bank account with the bank branch. The account details will be transferred to the depositors through post or email. You are able to avail phone service full time through phone banking services.
