The Indian government supports retirement accounts called Senior Citizens Savings Scheme (SCSS) accounts. The account’s benefits are available to older individuals in India who make a lump sum investment, either alone or with a partner. In addition to providing access to monthly income after retirement, the account will give income tax advantages. Anyone over the age of 60 may enroll in a Senior Citizens Savings Plan. They provide enticing features and unrivaled security, making them great long-term saving solutions.
Also, if a person deposits more money than the allowed amount, the extra money is returned to the account holder. From the date of maturity, the plan may be extended for an additional three years. The annual interest rate is 7.40%. (Q2 FY 2022-23). the five-year term (with an option to extend it for 3 more years). There is a $1,000 minimum investment requirement. The maximum investment amount is $15,000, whichever is smaller than the retirement benefit.
Read More: What is Pradhan Mantri Mudra Yojana?
Simple Procedure: Anybody in India can open an account at any recognized bank or post office.
SCSS Tax Benefits: The primary amount invested in this program is entitled to a deduction under Section 80C of the Income Tax Act, up to a cap of 1.5 lakhs per year. Moreover, interest earned on SCSS is taxed based on a person’s tax bracket. However, TDS (Tax Deducted at Source) is applicable if the sum surpasses 50,000 for a fiscal year. High-Interest Rate: SCSS provides loans at an annual interest rate of 7.4%.
Changing Interest Rates: Every three months, the SCSS interest rate is changed once. As a result, this interest rate is subject to change four times a year. Guaranteed Returns: As this plan is sponsored by the government, returns are guaranteed.
Additionally, unlike market-linked investments, which are prone to swings, SCSS is secure and provides guaranteed returns to people. Maturity Period: SCSS has a five-year maturity period. However, the program may be extended for an additional three years by submitting a properly completed Form B. Yet, in this case, the quarterly interest rate is charged.
Deposit Minimum: To start an account, a person must deposit a minimum of $1,000. Also, one may deposit up to 15 lakh rupees or, if less, their retirement benefit. Account closure: Premature withdrawals are offset by deductions. 1.5% will be deducted as a penalty if the account is closed before the stipulated 2-year timeframe. Moreover, 1% is taken off if closed after two years.
With extended accounts, however, withdrawals made after a year are not subject to fees. Quarterly Disbursals: With relation to the deposited sum, one can anticipate quarterly disbursements. On the first of April, July, October, and January, interest is credited to the account.
Account holders have the option to designate a candidate for the Senior Citizens Savings Plan. So, the nominee will get the outstanding balance if the account holder dies before maturity.
The prerequisites for SCSS eligibility are listed below:
- a person who, at the time of opening an SCSS account, was 60 years old or older.
- Those who have retired on superannuation and have attained the age of 55 but are under the age of 60 are eligible to open an SCSS account.
- Those who retired before the commencement of the SCSS guidelines and have reached the age of 55 are eligible for the program.
- NRIs (non-resident Indians) cannot open an SCSS account.
- Moreover, Hindu Undivided Families (HUF) are not permitted to open an SCSS account.
Non-resident Indians (NRIs) and Hindu Undivided Families (HUFs) are unable to invest in the Senior Citizen Savings Plan.
- Offline Process
Get the application form by going to the post office or bank branch that is closest to you.
Provide the properly completed form and the self-attested copies of the necessary documents.
- Online Process
If your bank offers it, you can open an SCSS account online. Listed below are some banks that provide the Senior Citizens’ Savings Scheme: Union Bank of India, Allahabad Bank, Syndicate Bank, Corporation Bank, State Bank of India, Bank of Baroda, ICICI Bank and Bank of India, Punjab National Bank, UCO Bank.
Read More: Who is Renuka Singh and Indian women’s cricket achievements
Interest Rate for SCSS
The SCSS interest rate at the moment is 7.4% p.a. When compared to savings and fixed deposit (FD) accounts, the SCSS offers substantial returns. Interest is due on March 31, June 30, September 30, and December 31 in the first instance and on the deposit dates of March 31, September 30, and December 31 thereafter.
Interest is paid in four equal quarterly installments on the first working day of April, July, October, and January. The only post offices that can accept quarterly interest payments, nevertheless, are those that have Core Banking capability.
- Benefits Icon KYC Records Utility Bills: Aadhar Card, Voter ID Card, PAN Card, and Passport Electricity and phone bills
- Birth certificate or senior citizen card (Case Specific)
- 2 photos in passport size