Senior Savings Plan: The government has recently announced interest rates for several small savings schemes, including the State Provident Fund, Sukanya Samriddhi Yojana and the Old People’s Savings Scheme (SCSS). For the quarter from July to September, the rates for these small savings plans remained unchanged. However, the interest rates of these small savings plans are much higher than those of bank term deposits.
The Senior Citizen Savings Scheme, or SCSS, is a special savings scheme specifically designed for the elderly population. It is for Indians over the age of 60, which means that the subscriber must be 60 years of age or older on the date of opening this scheme. Subscribers, given that they opted out of their services by opting into a VRS, are also eligible to open an SCSS account. The SCSS offers an interest rate of 7.4% per annum.
What are the features of the savings plan for seniors
-A person can open an SCSS account with a minimum deposit of Rs 1,000, while the maximum can be increased to Rs 15 lakh. The amount deposited in the account must be in multiples of Rs 1,000.
-The rate of interest under this scheme is 7.4% which is one of the highest. Interest is quarterly and applicable from the date of deposit to March 31, June 30, September 30 and December 31.
-In the event of an excess deposit in the SCSS account, the excess amount will be immediately refunded to the depositor.
-The maturity period under this scheme is five years, but can be extended beyond three years.
-Investments under this scheme are eligible for the benefit of Section 80C of the Income Tax Act 1961. However, interest is taxable if the total interest on all SCSS accounts exceeds Rs 50,000 in a financial year. Under Section 80C, individuals are eligible for tax deductions on investments up to Rs 1.5 lakh.
-If an SCSS account is closed before one year, no interest will be due and if any interest paid into the account will be recovered in principle, in accordance with the rules.
-In the event of the death of the account holder, from the date of death, the SCSS account will bear interest at the rate of the general savings account.
Eligibility for the Savings Scheme for Seniors
Here is who can open an Epargne Seniors account:
-A person over the age of 60, who is an Indian citizen.
– Retired civilian employees aged over 55 and under 60, provided that the investment is made within one month of receiving pension benefits.
-Retired Defense employees over the age of 50 and under 60 can open an SCSS account, provided the investment is made within one month of receiving pension benefits.
– HUFs and NRIs are not allowed to invest in the SCSS scheme
Banks offering SCSS services
Apart from the post office, several banks such as State Bank of India, Punjab National Bank, ICICI Bank, Central Bank of India, Bank of Baroda, Bank of Maharashtra and others offer Senior Citizens Savings Scheme.
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