A senior citizen savings account can be opened with post office or any bank. Many banks also offer higher interest rates to senior citizen when compared to others.
The account can be opened by one who has attained age of 60 years (55 years for those who have retired on superannuation or under a voluntary or special voluntary scheme) or above on the date of opening of the account.
Salient features of Senior Citizen Savings Scheme (SCSS)
- Tenure of the account is 5 years, which can be further extended by 3 years.
- Interest on the account is computed quarterly.
- Interest accrued is totally taxable. However, tax will be deducted at source.
- Investment should be made in multiples of Rs 1000/-, maximum investment can be made upto Rs 15 lakh.
- Premature withdrawal is allowed only after one year of opening the account. However, penalty will be levied for it.
- Non Resident Indians (NRIs), Persons of Indian Origin (PIO) and Hindu Undivided Family (HUF) are not eligible to open an account under the Scheme.
- Transfer of account from one deposit office to another is permitted.
- The depositor at the time of opening of the account, can nominate a person or persons who, in the event of death of the depositor, will be entitled to payment due on the account. However, nomination may be made by the depositor at any time after opening of the account but before its closure
- A depositor may extend the account for a further period of three years by making an application to the deposit office within a period of one year after maturity.
- In case, the account is closed after one year but before expiry of two years from the date of opening of the account, an amount equal to one and half per cent of the deposit shall be deducted.
- If the account is closed on or after the expiry of two years from the date of opening of the account, an amount equal to one per cent of the deposit shall be deducted.
- Non resident Indians (NRIs), Persons of Indian Origin (PIO) and Hindu Undivided Family (HUF) are not eligible to invest in the accounts under the SCSS, 2004. If a depositor becomes a Non-resident Indian subsequent to his/her opening the account and during the currency of the account under the SCSS Rules, the account may be allowed to continue till maturity, on a non-repatriation basis and the account will be marked as a Non-Resident account.