Senior Citizen Savings Scheme

July 14, 2018 Finance Talk Valli Sarvani 2 Comments

Normally, most people want to save their money in risk free investments. At the same, they want to get high interest.

Hence, majority of normal people in India especially, senior citizens prefer to invest their retiring money in fixed deposits.

However, there are some other risk of free investment schemes which are better than fixed deposits in terms of their returns.

Many senior citizens might not be aware that SCSS yields more interest than fixed deposits.

Here are some important facts about Senior Citizen Savings Scheme:

The SCSS is backed by the government.
It has a 5-year lock-in period and can be extended for additional 3 years.
Premature withdrawal is allowed after the completion of one year; however, certain charges are applicable on this.
The SCSS can be opened in any bank or post office if you have a savings account there. You can also move your account to other banks as well before the maturity of the scheme.
Interest rate is 8.3 percent at present which is higher than the interest on fixed deposits that yield 7.25 percent.
Nomination facility is also available. Nominees can withdraw the amount in event of death of the SCSS holder without any premature charges.
Those who attained 60 years of age or individuals who have retired under VRS in the age group of 55 to 60 years are eligible for this scheme.
Army personnel aged 50 years or more can also invest in this scheme. However, HUFs and NRIs are not allowed.
One can invest up to ₹15 lakh in this scheme. Multiples of ₹1,000 is allowed for investment.
Under section 80C, income tax exemption of ₹1.5 lakh is allowed in the year in which the deposit is made.
The interest earned is exempt up to ₹10,000. The exceeded interest will be deducted at source by the banks or post offices as per the rules

Image Credit: Sohel Patel (Free for commercial use)

Senior Citizen Savings Scheme | Fusion - WeRIndia