Monday, 29 November 2010

All about Senior Citizens Savings Scheme (SCSS)

Senior Citizens Saving Scheme is a deposit scheme introduced by Government of India to provide a good return to senior citizen through a safe investment scheme and also ensure them a good regular income.

Who can join the scheme?

A resident Indian citizen who has completed his 60 years of age can join SCSS and can get benefit from the scheme from any source of income. But if a person retired by the VRS (voluntary retirement Scheme) at the age of 55 (from their retirement benefit) also can join this scheme even if he is not completed 60 years. For ex-service men there is no age limit to join this scheme. Only resident Indian citizen can join this scheme. Non-Resident Indians (NRI), Persons of Indian Origin (PIO) and Hindu Undivided Families (HUF) etc., cannot join the SCSS. Joint account also can be opened in SCSS, but only with spouse, irrespective of the age of the spouse. In such a case, if the death of the one account holder is occurred, it can continue by the spouse, but the maximum investment must be 15 Lakhs. Nomination facility is also available at any stage and change of nomination, cancel of nomination etc., also possible.

Minimum and maximum deposit

A minimum deposit of Rs. 1000 is required to open SCSS account and multiples of Rs. 1000 up to a maximum amount of Rs. 15 Lakhs can be deposited.

Interest rate and Income Tax Impact

The Government offer 9% interest for the scheme and the interest is payable quarterly. The amount invested can consider exemption under section 80C of income tax act (Up to Rs. 1 Lakh) and the interest is taxable. If the interest is more than Rs. 5000 there will be TDS deducted unless you submitted form 15H (Only if your income is not in tax limit)

Maturity of SCSS

The deposit in SCSS will be matured in 5 years and can be extended another three years. One can withdraw the scheme before maturity after the 1st year with a penalty of 1.5% till 2nd year of joining the scheme and 1% penalty after 2nd year.
The main disadvantage of this Senior Citizens Saving Scheme is that it cannot be pledged for loan. You cannot take loan against the security of this saving scheme.

Where to open Senior Citizens Saving Scheme

The Senior Citizens Saving Scheme can be opened in designated Post Offices and specified branches of Public sector banks named Allahabad Bank, Bank of Baroda (BoB), Bank of India (BoI), Bank of Maharashtra (BoM), Canara Bank, Central Bank of India (CBI), Corporation Bank , Dena Bank, Indian Bank , Indian Overseas Bank (IOB), Punjab National Bank (PNB), State Bank of India (SBI), State Bank of Hyderabad, State Bank of Indore, State Bank of Bikaner and Jaipur (SBBJ), State Bank of Patiala, State Bank of Saurashtra , State Bank of Mysore ,State Bank of Travancore (SBT), Syndicate Bank, UCO Bank , Union Bank of India, United Bank of India, Vijaya Bank

This is a safe and secure investments and we suggest that all retired employees may take advantage of this secure investment. When the bank rate is high this won’t be profitable, but when the interest rate of bank is low it is secure and profitable and assure regular income.

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  2. I wish to invest in term deposit of Rs. 20 lakhs. What will be the interest rate for senior citizens.