Senior Citizen Saving Scheme (SCSS) is specially for those people whose age is more than 60 years. It has been prepared with the objective of providing regular income to senior citizens after retirement.
The interest rate of Senior Citizen Saving Scheme ie SCSS is 7.6 percent. In this scheme lump sum money is deposited. A minimum of Rs 1000 and a maximum of Rs 15 lakh can be invested. In this scheme, your money will double in nine and a half years i.e. 113 months. The maturity of this account is completed in 5 years. Interest is paid every quarter in this scheme.
The amount matures after 5 years
A minimum of Rs 1000 and a maximum of Rs 15 lakh can be deposited in this account. The amount is deposited in multiples of 1000 in the scheme. The deposit amount matures after 5 years from the date of opening of the account. If the depositor wishes, he can extend the term of the account for three years after the maturity of the deposit. But this extension option is available only once. Interest is payable on the deposit amount on quarterly basis. Presently the interest is 7.40% per annum which is effective from 01 April 2020. This rate will remain till 30 September. The rate is reviewed on March 31, June 30, September 30 and December 31.
Who can take advantage of this scheme
- Those senior citizens whose age is more than 60 years.
- People who have taken VRS between the age of 55 to 60 years can also take advantage of it.
- Retired defense personnel up to the age of 50 years.
Benefits of this scheme
- Senior Citizen Savings Scheme is a small savings scheme backed by the Government of India, hence it is considered one of the reliable and safe options.
- The interest rate of 7.40% per annum is much better than investments like FDs and savings accounts.
- This account can be transferred anywhere in India.
- Under Section 80C of the Income Tax Act, you can claim tax exemption of Rs 1.5 lakh per year by investing in this scheme.
- Interest is paid every three months under this scheme. Interest is credited to your account on the first day of every April, July, October and January.
Account opening process
To open this account in post office or public / private banks, you will have to fill a form, as well as submit this form along with two passport size photographs, identity proof and copies of other KYC documents. The advantage of opening an account with a bank is that the deposit interest can be directly credited to the savings bank account of the depositor with the bank branch. Account statements are sent to the depositors through post or email.