One of the prominent investment alternatives for senior citizens over 60 years of age is the Senior Citizens Savings Scheme. After retirement, individuals commonly search for ways to keep their investments secure, giving them a modest rate of return at the same time. SCSS provides the best stability and security for senior citizens blended with tax benefits and regular flow of income as well. Although other investment strategies, such as mutual funds, also provide high returns, but they are the riskier pools to invest. In the other side, SCSS, identical to bank FDs, PMVVY, and post office FDs, is a low-risk fixed return scheme. Although, unlike bank FDs, since it is a government-backed savings scheme, senior citizens' saving scheme is considered to be simpler, deposits are secured and returns are assured respectively. While the scheme has a 5-year period, it can be extended by 3 more consecutive years. Scroll down to know more about SCSS in order to make it your peaceful and perfect investment choice.
- A SCSS account can be opened by individuals over the age of 60 years. Being mentioned earlier, individuals aged 55 years but under 60 years who have retired on superannuation or under VRS can still open a SCSS account. Since the account is opened within 1 month of issuance of the retirement benefits, the deposit balance must not surpass the retirement benefit amount.
- As of 31 March/30 September/31 December, SCSS will deliver interest rates at 8.6 per cent per annum. You will get the interest automatically in your savings account at the same post office and can withdraw the interest amount via PDCs or Money Order.
- The initial amount for the opening of the SCSS account and the maximum balance are respectively set at Rs 1,000 and Rs 15 lakh. At the time of opening the account or even after opening the account, the account holder can also choose a nominee.
- You can close the SCSS account prematurely, but if done within 1 year, a 5 percent penalty will be deducted from the amount of the deposit and 1 percent of the deposit will be deducted if exit after 2 years. Interest will be deducted from the Tax Deducted at Source (TDS) if the amount is higher than Rs 10,000 per fiscal year. When they make contributions under this scheme, investors therefore qualify for the tax benefit under the Section 80C of the Income Tax Act, 1961.
- Investors can manage more than one account with their spouse, either individually or jointly. Remember that it is possible to open a joint account with a spouse and the investor is the primary depositor in the joint account. It is also possible to transfer these accounts from one post office to another across India.