New Delhi: Elderly people in India frequently rely on Fixed Bank Deposits (FD) or Recurring Deposits (RD) for stable income when they retire. The majority of people over the age of 60 in the country have a low appetite for risk and avoid investing in stock markets or mutual funds. They often turn to low-risk, high-return savings solutions. Apart from other people, bank and postal savings programs are still particularly popular among them. To ensure this, the central government has drawn up a plan aimed primarily at elders who wish to protect their future.
The Senior Citizen Savings Scheme (SCSS) is a unique savings scheme aimed exclusively at senior citizens. It caters to Indians over the age of 60, which means that the subscriber must be at least 60 years old at the time of opening the program. Subscribers will receive a reasonable return and guaranteed income from the post or bank.
Features of the savings plan for seniors
-A minimum deposit of Rs 1,000 is required to open an SCSS account, with a maximum deposit of Rs 15 lakh allowed. Money should be placed in multiples of Rs 1,000 in the account.
– This scheme has an interest rate of 7.4%, which is one of the highest. Interest is paid quarterly, beginning on the day of deposit and ending on March 31, June 30, September 30 and December 31.
-If an excess deposit is made to the SCSS account, the excess amount will be immediately refunded to the depositor.
-This scheme is valid for five years, but can be extended for three years.
-The benefit of Section 80C of the Income Tax Act 1961 applies to investments made under this scheme. However, if the total interest on all SCSS accounts reaches Rs 50,000 during a financial year, it is taxable.
-If an SCSS account is closed before one year, no interest will be paid and any interest paid on the account will be deducted from the principal, as required by regulation.
In the event of the Account Holder’s death, the SCSS Account will bear interest at the rate of a general savings account from the date of death.
Eligibility for the Savings Scheme for Seniors
-A person over the age of 60 who is an Indian citizen.
– Retired civilian employees aged 55 to 60, provided that the investment is made within one month of receiving retirement benefits.
-Retired Defense employees between the ages of 50 and 60 can create an SCSS account, with the exception that investments must be made within one month of receiving retirement benefits.