Senior citizens are often dependent on FDs and RDs for their retirement income. The majority of people who are above 60 in our country choose FDs and RDs over investing in stocks and mutual funds as the latter are high-risk investments. FD programs offered by different banks and post offices are chosen by senior citizens. Apart from these, the central government has come up with a savings scheme for senior citizens.
The SCSS scheme (Senior Citizen Savings Scheme) is a unique savings plan intended for senior citizens only (60 years or above). Let’s take a look at its benefits, eligibility and more.
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- Minimum deposit – Rs 1,000 is required when you open an SCSS account and the maximum deposit is Rs 15 lakh.
- The scheme provides 7.4% interest which is one of the highest, the interest is paid quarterly.
- If an excess deposit is made in the SCSS account, it is reimbursed to the depositor immediately.
- The scheme matures in 5 years, but one can extend it for another 3 years.
- The benefits of section 80C of the Income Tax Act of 1961 apply to this scheme. It is only taxable if the SCSS accounts reach Rs 50,000 in a financial year.
- If the account is closed within a year, no interest will be paid. In case of death of the account holder, the SCSS account will earn interest at the rate of a general savings account.
Eligibility
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- Indian citizens who are above the age of 60 can open this account
- Retired Civilian Employees between the ages of 55 and 60, with the condition that the investment is made within one month after receiving retirement benefits.
- Defense Retired Employees between the ages of 50 and 60 can register an SCSS account, with the exception that investments must be made within one month after receiving retirement benefits.