The Senior Citizen Savings Scheme is backed by the government, offering a regular income flow & safety & taxation benefits. This scheme allows investors to invest funds in a lump sum, i.e. one single instalment for a period of 5 years at an interest rate of 8.2% with quarterly payouts. Senior citizens can get their accounts opened either by visiting a bank or post office.
Features of Senior Citizen Savings Scheme
Provided are the features of the Senior Citizen Savings Scheme
- Quarterly Revision of Interest Rates
The interest rates offered under SCSS are derived depending upon multiple factors, like inflation rate, prevalent market rates of interest, etc. Once derived, they are revised on a quarterly basis as well.
- Guaranteed Returns
This scheme offers investors a fixed rate of interest, which ensures them safe, secure & predictable returns. To know the estimated returns, investors can use an Investment Calculator.
- Minimum & Maximum Deposit
This scheme allows the minimum amount of deposit to be INR 1000. The maximum amount under this scheme can be INR 30 lakhs or the retirement benefit, whichever is lower.
- Maturity Tenure
The senior citizen savings scheme comes with a tenure of 5 years, which can further be extended for another 3 years.
- Premature Withdrawals & Account Closure
This scheme allows a premature withdrawal of the amount deposited after one year of its opening. In case the account is closed before 2 years, a penalty amount of 1.5% would be charged. If the account is closed after 2 years, a penalty of 1% will be charged.
- Quarterly Disbursal
This scheme allows quarterly disbursals of the interest amount, i.e. 1st day of April, July, October, & January.
- Mode of Deposit
The mode of deposit can be cash if the amount of deposit is less than INR 1,00,000, & it has to be in cheques if the amount is more than INR 1,00,000.
- Nomination Facility
Senior citizens can also appoint a nominee who will receive the amount due in case of their sudden demise.
- Security of Capital
This scheme is backed by the government. Hence, the amount of investors remains secure.
Eligibility Criteria
Provide are the eligibility parameters to be met to invest funds in the Senior Citizen Savings Scheme:
- This scheme is valid for individuals above 60 years of age.
- It includes retired civilian employees over 55 years of age & less than 60 years of age. The investment has to be made within 1 month of the receipt of retirement benefits.
- It includes retired defence employees over 50 years of age & less than 60 years of age. The investment has to be made within 1 month of the receipt of retirement benefits.
- Non-resident individuals, i.e. NRIs & Hindu Undivided Families, cannot open senior citizen savings accounts.
- Any senior citizen can open an SCSS account in an individual or joint capacity.
How to Invest Money in Senior Citizen Savings Scheme?
Now that we know what exactly the Senior citizen savings scheme is let us know the steps on How to Invest Money in SCSS:
Step 1: The amount received as retirement benefit from the employer must be invested within one month of its receipt.
Step 2: This account has to be opened by investing the funds in a single instalment ranging between INR 1000 & INR 30 lakh.
Step 3: The retirement benefit includes the following:
- Leave Encashment
- Commuted Value of Pension
- Superannuation gratuity
- Provident Fund Dues
- Ex-gratia payment under the Voluntary retirement scheme
- Retirement-cum-withdrawal benefit under Employees family pension scheme
- On retirement, the employer pays the savings part of the Group Savings Linked Insurance Scheme.
Step 4: If the amount to be deposited exceeds the upper limit, the amount over & above is refunded back to the account holder.
Step 5: The interest amount will be credited on a quarterly basis.
Step 6: One can withdraw the interest amount through auto-credit mode through the post office or ECS, i.e. Electronic Clearing Service.
Step 7: This account can also be closed prematurely.
Step 8: One can also extend the account service for another 3 years within one year from its maturity date.
How to Open an Account under the Senior Citizen Scheme?
Provided are the different modes to get the account opened under SCSS:
- By Visiting Bank
- Visit any nearest bank branch or branch where you maintain your savings account.
- Fill out the application form with all the details required.
- Submit the same along with the documents & deposit the money either in cash or by cheque.
- The application will be processed once the payment is verified.
- Your SCSS account is now open.
- By Filling out the Post Office SCSS Form online
- Enter the details, such as the branch name of the post office on the top left side & the account number of the post office savings account.
- Also, provide the branch address of the Post office.
- Upload the photograph of the account holder.
- Input the name of the account holder, & from the drop-down menu, choose the option “SCSS’.
- Pick any of the options from “Additional Facilities Available”.
- Choose the type of account holder, i.e. minor with a guardian, self, or a person of unsound mind with a guardian.
- Choose the type of account, i.e., single, survivor, or both.
- Provide the amount to be invested both in numbers & in words.
- If the payment mode is cheque, enter the details of the cheque, such as cheque number & cheque date.
- Provide the personal details of the account holder.
- Tick the documents that have been uploaded.
- The account holder is then required to sign Pages 1 & 2.
- Also, provide the nominee’s details along with their contact details with the accountholder’s signature to verify the correctness of the details provided.
Conclusion
A Senior Citizen Savings Scheme is a secured financial investment option which offers guaranteed returns, competitive interest rates, hassle-free registration, & tax benefits. Also, this scheme is backed by the government, hence offering safety & security along with no risk of capital loss.
