Investment
oi-Vipul Das
The SCSS, a public scheme, allows seniors to invest funds in or for retirement benefits and earn 7.4% interest income on the deposit on a quarterly basis. An SCSS account can be opened individually or jointly with your spouse at any bank or post office across the country. For potential investors, the post office offers several deposit formulas, that is to say small savings banks. The SCSS, or Senior Citizen Savings Scheme, which also benefits from an income tax deduction under Section 80C, is one of the main investment vehicles for seniors among small savings plans from the post office. Seniors, i.e. people aged 60 and over as indicated by the title, can invest in the SCSS to earn regular interest income. Here are the main features you should consider before opening an SCSS account individually or jointly.
Eligibility
The eligibility conditions for potential investors are as follows:
- A natural person who has reached the age of 60 when opening a SCSS account.
- People aged 55 to 60 who retired from the retirement pension
- Retired defense service personnel with a minimum age limit of 50, (except civil defense employees).
- Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not permitted to invest in SCSS.
In case of joint account holders
With the spouse, SCSS accounts can be opened jointly. For the age limit, the age of the first or main account holder is assumed. For the second person, no age restriction is required. The credit amount of the SCSS account is linked to the first account holder only. With a maximum deposit of up to Rs 15 lakh on each account, both spouses (if eligible by age standards) can maintain single and joint accounts with each other.
Minimum and maximum investment threshold
The maximum amount that can be deposited by an individual in this program is currently limited to Rs 15 lakh. Only check deposits greater than Rs 1 lakh will be approved and the amount deposited into the scheme cannot exceed the retirement funds one receives. Under the plan, you can keep more than one account. However, for all SCSS accounts, the deposit amount should not exceed the maximum limit.
How to open an SCSS account?
By completing the account opening form or application form and depositing a minimum of Rs 1,000 or any amount in multiples of Rs 1,000, no more than Rs 15 lakh on can open a SCSS account jointly or individually. Details such as PAN number (mandatory), proof of address, age and number of accounts already opened under the scheme and the amount invested in each account must be specified in the application form. In case the individual does not have a PAN, he must apply for it and specify the request number on the request form in order to successfully open an account.
Ease of premature removal
For the principal, the SCSS scheme has a blocking period of 5 years and can also be extended to 8 consecutive years. After one year, early withdrawals are allowed but certain penalties are imposed for the same which are as follows:
If you make a withdrawal before the end of the 2 years from the date of opening the account: a penalty of 1.5% will be deducted from the amount of the deposit.
If you make a withdrawal between 2 and 5 years: 1% penalty will be deducted.
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