How to invest in Senior Citizens Savings Scheme?
Senior Citizens Savings Scheme is a popular investment scheme among the retired citizens in India. Apart from PPF, FD, NSC, and KVP. The Senior Citizens Savings Scheme has been popular because it gives slightly higher interest rates compared with other savings instruments.
We will have a detailed look in this article as How to invest in Senior Citizens Savings Scheme , it’s benefits, should you invest in Senior Citizens Savings Scheme
What is the Senior Citizens Savings Scheme?
Senior Citizens Savings Scheme (SCSS) is a government-backed savings instrument offered to Indian residents aged over 60 years. The deposit matures after 5 years from the date of account opening but can be extended once by an additional 3 years.
What is the interest rate for SCSS?
The current interest rate for SCSS(Senior Citizens Savings Scheme) is 7.4% as of July 2020.
This is the highest interest rate among the various small savings schemes in India. SCSS is available through Public / Private sector banks and India Post Offices.
Being a government-backed savings instrument, the terms and conditions applicable to the SCSS are the same, regardless of the bank/ post office, you invest through.
What is the eligibility For SCSS Scheme?
An individual must be a citizen of India. Non-residential Indians (NRIs) or a person of Indian origin (PIOs) are not eligible to avail of this feature. Also, Hindu Undivided Family (HUFs) do not qualify for this scheme.
1. Any resident of India aged 60 years or above is eligible for this scheme. There are few exceptions to the age bar:
2. Retirees in the age group of 55-60 years who have opted for Voluntary Retirement Scheme (VRS) or Superannuation are eligible to avail the scheme if they apply for the same within one month of gaining their retirement perks.
3 Retired defense personnel can avail of this scheme irrespective of their age, provided they fulfill all other conditions.
This scheme can be availed with a minimum deposit amount of Rs. 1000.
An individual can invest a maximum amount of Rs 15 lakhs, individually or jointly in an SCSS account (in multiples of Rs 1,000). The amount invested in the scheme cannot exceed the money that has been received on retirement.
Hence, the individual can invest either Rs 15 lakhs or the amount received as a retirement benefit, whichever is lower. The account can be opened by cash for an amount below Rs 1 lakh and by cheque for an amount exceeding Rs 1 lakh.
How to invest in Senior Citizens Savings Scheme?
You can visit any of the below banks to open your account, alternatively, you can open the account in Post Office.
1. Allahabad Bank 2. Andhra bank
3. Bank of Maharashtra
4. Bank of Baroda
5. Bank of India
6. Corporation Bank
7. Canara Bank
8. Central Bank of India
9. Dena Bank
10. IDBI Bank
11. Indian Bank
12. Indian Overseas Bank
13. Punjab National Bank
14. State Bank of India
15. Syndicate Bank
16. UCO Bank
17. Union Bank of India
18. Vijaya Bank
19. ICICI Bank
You can check about post office Senior Citizens Savings Scheme details here:-
What documents are required for Senior Citizens Savings Scheme?
1. Form A has to be filled for opening an SCSS account.
2. Identity proof like PAN card, Passport to be presented.
3. Address proof such as Telephone bill, Aadhar card is mandatory.
4. A document for proof of age is required. This could be in the form of a Passport, Senior Citizen Card, a Birth certificate issued by the Corporation or Registrar of Births and Deaths, Voter ID card, PAN card, etc.
5. 2 Passport size photographs.
What are Premature Closure charges for Senior Citizens Savings Scheme?
In case of premature closure after one year but before the expiry of two years from the date of opening of the account, an amount equal to one and a half percent of the deposit will be deducted.
In case of premature closure after two years from the date of opening of the account, an amount equal to one percent of the deposit will be deducted.
The depositor availing the facility of extension of account may be permitted to withdraw the deposit & close the account at any time after the expiry of one year from the date of extension of the account without any deduction.
What are the Benefits of the Senior Citizens Savings Scheme?
1. Safe and Reliable: This is a government-sponsored investment scheme and hence is considered to be one the safest and most reliable investment options.
2.Simple and easy process: The process to open an SCSS account is simple and can be opened at any authorized bank or any post office in India. It is also transferable across India.
3.Good returns: At 7.4 %(as of April 2020) the return rate is very good as compared to a savings or FD account.
4. Nomination: Nomination facility is available at the time of opening an SCSS account by means of submitting an application as part of Form C. This submission is also accompanied by the passbook to the Branch.
5. Tax benefits: Tax deduction of up to Rs 1.5 lakh can be claimed under Section 80C of the Indian Tax Act, 1961.
6. Flexible: The tenure of this investment scheme is flexible with an average tenure of 5 years which can be extended up to 3 additional years.
Can I invest in the Senior Citizens Savings Scheme online?
Unfortunately NO. Since this facility, is for senior citizens only you need to visit the Bank branch or the post office to open the account.
You can check about other investment options available for you here:- Top 10 investment options and check if you need to invest in the Senior Citizens Savings Scheme online
Is investing in the Senior Citizens Savings Scheme good?
If you are ultra-conservative and want to invest in safe investment options then investing SCSS is good. There are alternatives such as debt mutual funds which can give you similar returns with little risk but debt funds offer you the flexibility of withdrawing money quickly whereas SCSS has a lock-in period of 5 years.