The Seniors Savings Plan currently offers an interest rate of 7.4%. A natural person over the age of 60 can open a Senior Savings Plan account, but there are some exceptions to this rule. In special cases, the government authorizes the opening of a savings plan for seniors by people under the age of 60, under certain conditions. The Seniors Savings Plan has a duration of five years which can be extended. It has a maximum investment limit of ??15 lakh per person.
Who can open a Seniors Savings account?
-A person over 60 years old
-Retired defense employees over the age of 50 and under the age of 60, provided that the investment is made within one month of receipt of pension benefits.
-Retired civilian employees over the age of 55 and under the age of 60, provided that the investment is made within one month of receipt of pension benefits. The Post Office recently clarified that this rule does not specify the category of employer, whether it is the private sector or the government. Here’s what the Postal Service clarified:
“Rule 3 (ii) of the Savings Plan for Seniors 2019 specifies, a person who has reached the age of 55 or over but less than sixty, and who has retired on the retirement pension or otherwise on the date of opening an account under this scheme is eligible to open the account, provided that the account is opened by that person within a period of one month from the date of receipt of the benefits of retirement pension and proof of the date of payment of those retirement benefits as well as a certificate from the employer stating details of the retirement on superannuation or otherwise, retirement benefits, employment held and period of this job with the employer, is attached to the application form ”.
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Here are other characteristics of a Seniors Savings Account Plan:
-Investments under this scheme are eligible for the benefit of Article 80C of the Income Tax Act 1961.
-Interest is paid to the subscriber on a quarterly basis
-If the interest payable quarterly is not claimed by an account holder, such interest does not generate additional interest.
-A Seniors Savings account can be closed prematurely at any time after the opening date. If the account is closed before one year, no interest will be due and if the interest paid into the account will be recovered in principle.
-The account holder can extend the account for an additional period of 3 years from the due date by submitting the prescribed form with passbook to the relevant post office. The account can be extended within one year of expiration.
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